Obamacare: Post from Facebook

[patrice]

11. Yes. It could be an insurance company that already had overhead costs that exceeded the ACA

MLR mandate of 15% and it probably was already used to operating with that high overhead for a long time, so changing in order to meet the 85:15, services : overhead, ratio mandated by the ACA Medical Loss Ratio at the same premium dollar amount, is quite a bit more difficult for them, so they raised the premium amount in order to cover expenses that they were previously covering with a higher percentage of the premium dollar and, thus, a lower percentage spent on services, which the ACA will no longer allow. This could well be one of those companies that may eventually be absorbed by other more efficient companies as competition increases within the ACA mandated insurance exchanges. They'll either get their premium amounts down and covering comparable services, while meeting the 85:15 standard, or they will go away.