WASHINGTON - Insurer profits are up this year in Obamacare's individual exchanges, according to a new report Monday - a sign that the market is stabilizing and that Republican claims of collapse have not come to pass.
The analysis by the nonpartisan Kaiser Family Foundation examined first-quarter earnings in 2017 and found insurance companies are paying a lower share of premiums out in medical claims than in any comparable period since the law went into effect. The current mix of enrollees do not appear to be less healthy than in the past, an important factor in whether companies can turn a profit.
"These new data offer more evidence that the individual market has been stabilizing and insurers are regaining profitability," the report's authors wrote.
Deep Banerjee, an analyst at S&P Global Ratings, said it was too early to fully gauge the individual market's health in 2017, but that the Kaiser Family Foundation report was consistent with S&P's projections that insurer profits would rise this year and in 2018. He described the marketplace as "improving, but fragile."
A recent report by the Congressional Budget Office also predicted that Obamacare's exchanges would eventually become stable despite a significant hike in premiums last year and lower participation by insurers.
