Only about one-third of health insurers came out ahead in their first year in the ObamaCare marketplace, according to a study by the Commonwealth Fund released Wednesday.
While insurers made nearly twice as much money from healthcare premiums in 2014, overall profits “diminished noticeably” because of higher payouts, according to the expansive new analysis on companies participating in the exchanges.
Overall, health insurers underestimated their total medical costs by about 5.7 percent in their first year.
About a quarter of insurers did “substantially worse,” underestimating their claims by an average of 35 percent. That means only a small fraction of insurers “fared especially poorly,” the report said.
Many companies recouped some of the money lost from ObamaCare plans with the help of the law’s reinsurance payments.
The reinsurance program, which is slated to end in 2017, makes payments to insurers with far higher-than-expected medical costs in their ObamaCare plans.
With reinsurance payments, medical claims were only about 2 percent higher than insurers had expected in the first year, the report said.
Researchers said the reinsurance program “played a crucial role in helping insurers transition” — and the federal government should consider extending the program until the ObamaCare marketplace “has matured.”
The analysis by then nonprofit Commonwealth Fund included all 144 insurers with at least 1,000 customers that sold mostly ObamaCare plans in 2014.