Some insurers turned a profit on the ACA exchanges last year, analysis finds—but uncertainty remains

Many insurers offering plans in the Affordable Care Act's exchanges turned a profit for the first time in 2017, according to a new analysis, but the future still looks bleak. 

Politico studied financial documents for 29 Blue Cross Blue Shield plans and found that the main reason for increased profitability was higher premiums, which increased on average by more than 25% last year. 

They found that Blues plans on average spent 80% of premiums collected on members' medical costs, which is below the 85% spending benchmark that indicates profitability, for example. The 80% average is an increase of 12 percentage points from 2016.  

Though those 2017 results are encouraging, payers who participate in the individual marketplaces face a number of challenges as they begin planning for 2019 in earnest. The repeal of the individual mandate will take effect next year, and could encourage younger, healthier people to forego insurance, leading to a less-than-optimal risk mix, experts have warned. 

In California, for example, a recent study suggests that 378,000 people will pass on insurance coverage following the mandate repeal, including 250,000 people who are currently enrolled in plans through the state's exchange, Covered California. 

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In addition, the state of cost-sharing reduction payments remains up in the air, as discussions on bipartisan ACA stabilization legislation have largely stalled amid a squabble over abortion language

Plus, Politico found that some payers continued to struggle in the markets last year. Of the 29 plans examined, eight spent more than 90% of premiums collected, which suggests they likely lost money on their ACA plans. 

"I don't think we've turned the corner," Kurt Kossen, president of retail markets for Health Services Corporation, told the outlet. "One year of being able to make a profit out of four is certainly not stable." 

As insurers are gearing up to announce their 2019 rates, experts warn that significant premium hikes are likely if the markets remain in a state of flux. Covered California projects that some states face "catastrophic" premium increases over the next three years, and that each state will see an increase of between 12% and 32% next year.