Minnesota: PreferredOne had to pull out due to bad decisions on company's part, not the MNsure exchange
One of last week's big ACA stories was the news that the largest insurance company on Minnesota's exchange, PreferredOne, was dropping out of MNsure.
ACA critics pounced all over this news as Yet More Proof That Obamacare Is Failing®, even though pretty much every "proof" they've presented to date has turned out to be nonsense or, at best, vastly exaggerated (never mind, either, the fact that overall, 77 new insurers are joining the ACA exchanges while only 15 are dropping out, for a net gain of 62 companies nationally).
An interesting analysis in the Star-Tribune, however, points out that for all the fuss made over PreferredOne's departure, it had very little to do with any failings on the part of the MNsure exchange itself:
...In fact, what happened to PreferredOne was so predictable that had this not taken place on the politically red-hot MNsure exchange, the decision may not have even made news.
...Like all health insurers, PreferredOne has to operate in a market where no one really knows the cost of a new customer for awhile. A snowmobile maker pretty much knows what the machine costs the day the sale is booked, but not so in insurance.
Sure, the insurer gets to collect the premiums, but what it also gets is an unknown liability it tries to estimate.
...PreferredOne had made its decision. It was going to grab some market share.
...So how did taking the low-price position in an unproven market work out? About as you’d expect.
Read the full piece. You'll probably see more stories like this over the next few years as companies which misjudge the ACA exchange market crash and burn, while others kick butt.
That's called the Invisible Hand of the Free Market. It's supposed to "pick winners and losers", remember?