Why Are Health Insurance Companies Losing Money in Texas?
From Texas Standard:
About one million Texans get health insurance through exchanges created by the Affordable Care Act, also known as Obamacare.
Texans account for one-tenth of all Americans insured through the exchanges, a total of 10 million new customers and $84 billion in additional revenue for insurers.
However, all these new members don’t equal big profits for insurance providers. The state’s largest insurer, Blue Cross Blue Shield of Texas, for example, reports losing almost $400 million on exchange business in 2014.
The Dallas Morning News business' columnist Mitchell Schnurman says about two-thirds of the companies that are offering plans on the exchanges are losing money. He explains why the losses are bigger in Texas.
"In short, they didn't charge as much as they needed to for premiums," Schnurman says. "So they brought in about $2.1 billion in premiums, but they paid out close to over $2.5 billion in claims."
Schnurman says the state has the highest rate of uninsured in the country, meaning many Texans have been waiting for the chance to get health care.
"Once they got coverage and an insurance card, they moved in en masse," he says. "This could be as simple as the first time you went to a doctor and have a check-up and have tests for cholesterol, but it went much deeper than that."
According to Schnurman, organ transplants and knee replacements – patients who needed critical care – made a more expensive impact on claims.
Listen to the full interview in the player above.