Humana announced that it expects to tap the three risk adjustment mechanisms in ObamaCare for between $250 and $450 million in 2014.
This amounts to about 25 percent of the insurer’s expected exchange revenue.
This money is needed to offset losses that the insurer will take as a result of slower enrollment in its ObamaCare plans, and a skewed risk pool that weighs more heavily toward older and less healthy members than it originally budgeted.
More than half of the money will come from the $25 billion reinsurance pool that ObamaCare provides (collected through a tax on employer-sponsored health plans).
The other half will come mostly from the risk corridors. Humana is expected to book the money as revenue to offset shortfalls between what it collects in exchange premiums and pays out in medical claims.
Humana said that it had enrolled 202,000 people on its exchange-based health plans as of January 31st, of which 82 percent were eligible for subsidies.
Among the other nuggets that Humana offered: Most people (58%) are selecting silver plans, but not as many as the insurer originally anticipated.
Cost sharing subsidies only attach to silver plans.
These are extra subsidies designed to offset out of pocket costs for consumers who fall between 150% and 250% of the Federal poverty level.
The tilt toward silver plans suggests that the exchanges are still drawing heavily from this income demographic — but not as heavily as expected.
Finally, the mix of people enrolling in Humana plans still skews toward older individuals.
Only 20 percent of enrollees are below the age of 30,while 42 percent are aged 50-64.
http://www.forbes.com/sites/scottgottlieb/2014/02/06/obamacare-bailout-for-one-insurer-450-million-in-2014/
