After expanding to accommodate the requirements of the Affordable Care Act (Obamacare) last year, a Wisconsin-based health insurance provider, founded in 1892, announced it will be closing its doors.
Assurant Health opted not to participate in the first Obamacare enrollment period in 2013; however, in November of that year, the company announced it would be selling plans in 16 states in 2014.
The company and industry watchers blamed its losses directly on the impact of Obamacare. Following implementation of the requirements to participate in the ACA exchanges, Assurant lost $63.7 million in 2014. The insurer raised its rates by 20 percent in 2015, in hopes of returning to profitability, but lost between $80 to $90 million during the first quarter of this year.
Assurant currently provides plans for approximately 1 million people, with a revenue of about $2 billion.
“In a letter to its shareholders, [the company] said it lost money because of a reduction in recoveries under Obamacare’s risk mitigation programs and increased claims on the health care law’s 2015 policies,” the Daily Signal reports.
“It’s significant,” Andrew Edelsberg, a vice president of the rating agency A.M. Best, told The Daily Signal of how Obamacare affected Assurant Health. “It’s impacted the industry.”
Ed Haislmaier, health policy expert at The Heritage Foundation, says that government intervention in the healthcare market is having the predictable effect of pushing private companies out of business.