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Long run insurance companies and profit

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Is it true that in the long run insurance (Obamacare) companies can make profits at the expense of their customers?

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Solution Summary

The answer to this problem explains how insurance companies will profit from Obamacare. The references related to the answer are also included.

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It is true that in the long run insurance companies can make profits at the expense of their customers. First, several plans on Obamacare exchanges will not be low cost. The insurers will get big profits. The new law has three prongs namely reinsurance, risk corridors, and risk adjustment. The Health and Human Services Department will reimburse insurers for the cost of covering sick consumers. There are risk corridors that protect the overall ...

Solution provided by:
Hatim Baxamusa, MBA
Education
  • BSc , University of Calcutta
  • MBA, Eastern Institute for Integrated Learning in Management
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