"Why Obamacare won’t spiral into fiery, actuarial doom"

[applegrove]

Why Obamacare won’t spiral into fiery, actuarial doom

Posted by Sarah Kliff at the Washington Post

http://www.washingtonpost.com/blogs/wonkblog/wp/2013/12/17/why-obamacare-wont-spiral-into-fiery-actuarial-doom/?tid=rssfeed

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"I think it shows age is important, but not super important," Levitt says. "And that also depends a lot on your perspective. An increase of 2.5 percent isn't going to precipitate a death spiral. When premiums are going up pretty slowly though, you ideally wouldn't want to add another 2.5 percent increase in 2015."

For insurers, Levitt argues, a situation where medical spending is 2.5 percent higher than premiums paid in could be noticeably detrimental, given that insurers typically run profit margins around 3 percent to 4 percent.

"When you're talking about profit margins around there, they might not lose money, but they might not make that much, either," Levitt says.

As for a death spiral, Levitt and his colleagues' research suggests that's a very unlikely outcome -- no matter what the doomsayers might be predicting.



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[Demeter]

1. I agree, it will be an economic unaffordability doom