Insurer warnings cast doubt on ACA exchange future

Health insurance exchanges created to help millions of people find coverage are turning into money-losing ventures for many insurers.

"Sometimes I think of (the exchanges) as a little campfire that's going to grow, but right now it needs a little more oxygen or kindling," said Katherine Hempstead, director of health insurance coverage programs for the Robert Wood Johnson Foundation, a nonpartisan organization that has assisted state governments on ACA insurance expansions.

Insurers have struggled in many markets because people who couldn't get coverage previously due to a condition were among the first to sign up when the exchanges opened a few years ago.

CEO Jerry Dworak said he asked the exchange operator for details on whether the patient had a legitimate reason for the special enrollment.

The federal government runs exchanges in most states and announced Wednesday that it will start seeking proof that customers qualify for these special enrollment periods.

Some government programs that provided temporary financial support for insurers as they set up their exchange business are winding down.

The co-op has since dropped an unprofitable plan and caught a break when a state Medicaid expansion took away high-cost patients.

Insurers will continue to shuffle in and out of the exchanges for a few years, predicts Larry Levitt, a senior vice president for the Kaiser Family Foundation, which studies health care issues.

[...] ultimately, he expects them to keep supporting this still-new business opportunity, which also is important to customers because the exchanges offer income-based tax credits to help buy coverage.