Health Insurers Warn Premiums Could Increase Sharply Next Year

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    Mar 25, 2013 11:14 PM GMT
    http://online.wsj.com/article/SB10001424127887324557804578374761054496682.html?mod=rss_mobile_uber_feed

    Health insurers are privately warning brokers that premiums for many individuals and small businesses could increase sharply next year because of the health-care overhaul law, with the nation's biggest firm projecting that rates could more than double for some consumers buying their own plans. [...]

    Jeff Alter, who leads UnitedHealth's employer and individual insurance business, said the numbers represented a "high-end scenario," not an average. "There are some scenarios in which a member could see as much as a 116% increase or over," he said, though others, such as some older consumers, could see decreases. He said the company dwelled on the possible increases because it was trying to prepare brokers to speak with clients facing big jumps.
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    Mar 25, 2013 11:38 PM GMT
    http://reason.com/blog/2013/03/25/californias-910-million-obamacare-exchan

    NDHow much does it cost to open one of ObamaCare’s state-run health exchanges? In California, the answer is nearly $910 million and counting.

    Health policy consultant Robert Laszewski notes that California has already received a little more than $909 million in federal grants—an amount that’s actually $32 million less than the state’s exchange director asked for. Does that sound like a fair price? It’s not really possible to make a direct comparison to any private sector initiative, but Laszewski provides some useful context:

    For some additional perspective I took a look at what it cost to launch the private insurance marketing site, Esurance. That company sells not only health insurance but also things like homeowners and auto insurance across the country. When I put my zip code into their system along with my age, they offered me 87 different health plans from all the big players in my area. Now granted, the new health insurance exchanges are more complex because they have to interface with Medicaid and the IRS as well as calculate subsidies. But the order of magnitude difference in what it cost to launch esurance compared to the California exchange is pretty big.

    Privately funded Esurance began its multi-product national web business in 1998 with an initial $5.5 million round of venture fund investment in 1999 and a second round of $34 million a few months later.

    The start-up experience of other major web companies is also instructive. Facebook received $13.7 million to launch in 2005. eBay was founded in 1995 and received its first venture money in 1997––$6.7 million in 1997.

    Even doubling these investments for inflation still leaves quite a gap.