worrying symptoms,” said Megan McArdle. The nation’s largest health
insurer, UnitedHealth, topped off a “horrible, no good, very bad news
cycle” for the Affordable Care Act last week, when it ab ruptly announced
it was facing losses worth up to $500 million on its 2015
and 2016 exchange policies, and might have to pull out of Obamacare
entirely after 2016. Many other insurers are struggling to make money
in these markets, and have had to raise rates and deductibles. The crux
of the problem is “adverse selection”: The young and healthy are resisting
buying Obamacare policies, or waiting to sign up for coverage only
when they need expensive medical care. That could leave insurers with
“a handful of very sick people and a huge number of very expensive
claims,” forcing them to raise rates. Higher rates could then lead more
healthy, young people to drop their insurance—the dreaded “death spiral.”
Other insurance companies still say they’re optimistic the enrollees
will balance out over the next two years. But if insurers can’t make
money through Obamacare, this “won’t end well.”
