President Donald Trump says health insurers have been “enriched” by President Barack Obama’s Affordable Care Act. So why are companies pulling back from the law’s insurance marketplaces?
TRUMP: “I won’t do anything to enrich the insurance companies because right now the insurance companies are being enriched. They’ve been enriched by Obamacare like nothing anybody’s ever seen before.” — Speaking to reporters at the White House Wednesday.
“I am supportive of Lamar as a person & also of the process, but I can never support bailing out ins co’s who have made a fortune w/ O’Care.” — Wednesday morning Tweet.
THE FACTS: Health insurance is profitable, but the Affordable Care Act plays a small role — if any — for many insurers.
Big companies like Aetna and the Blue Cross-Blue Shield insurer Anthem have actually pulled back from many of the law’s insurance marketplaces, citing either steep losses or uncertainty over government funding. The largest insurer, UnitedHealth Group, slashed its marketplace participation to only three states this year. Yet it still earned nearly $2.49 billion in the recently concluded third quarter.
Insurers have gained customers from the ACA’s marketplaces and its expansion of the state-and-federally funded Medicaid program for the poor. Some, like Centene, say they are making money on the exchanges and expanding into new states.
But they’ve also had to deal with an additional tax imposed by the ACA and funding cuts for Medicare Advantage plans, which are privately-run versions of the federal Medicare program for the elderly.
Companies don’t single out how much they’ve made through the ACA’s marketplaces or Medicaid expansion. These are generally smaller parts of their business.
Insurers usually pull most of their profits from some combination of employer-sponsored coverage and government programs like Medicaid and Medicare. They were making money long before the ACA came along.