UnitedHealth says trouble looming for New York Obamacare plans

State regulators required that UnitedHealth’s New York rates take into account payments from the law’s risk-adjustment program, Golden said. The program redistributes funds from health insurers who have low-risk, low-cost patients, to those with less healthy, more expensive customers.

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UnitedHealth requested a 22% rate increase for individual Obamacare plans. Instead, state regulators allowed the company to boost rates by 1.65%. The company also sells business under the Oxford brand, which requested a 5.32% rate increase, and was forced instead to cut rates by 12.25%.

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buck said:

UnitedHealth says trouble looming for New York Obamacare plans due to Health Republic's failure last year | Crain's New York Business

UHC had their premiums in NY set based on the assumption that they would be getting risk adjustment payment. that will probably not be occurring as expected.

This helped to keep the rate increases in NY lower than needed.

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joG said:

Low risk policies subsidizing high risk life style premia seems a very interesting question. There is probably no good answer to it. No risk adjustment and there is no reason to adjust your life style.

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buck said:

I may not be understanding your point.. But the risk adjustments discussed in the OP are insurance companies with profits giving some of those profits to the insurance companies that lost money.

In other words, since the NY regulators assumed that UHC would be receiving money from some of the other insurance companies and required that they take that into account, the premiums were set by those NY regulators at a lower level then needed.

It helped keep the premium increases artificially low in that state and (very likely) others. Further, since those risk adjustments will be lower than assumed by the NY reuglators.. UHC is stuck with premiums lower than needed to cover their claims in NY.

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