No 'Death Spiral' for Obamacare, Analysis Shows

The likelihood that individual insurance markets created under Obamacare will fail is slight, according to a new financial analysis that challenges Republican pronouncements.

Standard & Poor's assessed the performance of a number of Blue Cross plans in nearly three dozen states since Obamacare took effect three years ago, The New York Times reported.

The analysis showed that insurers' losses were significantly reduced last year, that they are likely to break even this year, and that most could show profits in 2018. In total, the insurers cover more than five million people in the individual market.

After initial money-losing years, "we are seeing the first signs in 2016 that this market could be manageable for most health insurers," according to the analysts, who added that the "market is not in a 'death spiral,' " The Times reported.

The findings support the Congressional Budget Office's assessment that individual markets are relatively stable under Obamacare, which contradicts some Republican predictions of volatility.

"Things are getting better," in the private insurance markets, according to Gary Claxton, a vice president at the Kaiser Family Foundation, which has been closely tracking insurers' progress, The Times reported.

It took longer than expected, but it seems insurers are beginning to understand how the new individual market works, report co-author and S & P credit analyst Deep Banerjee said.

He noted that companies have increased their prices and are now largely covering their medical costs, and have also significantly narrowed their networks to include fewer doctors and hospitals as a way to lower those costs, The Times reported.


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