Health Insurers Will Have to Cover Most Costs of Reinstating Cancelled Policies
Health insurance companies will have to cover most of the costs of reinstating policies cancelled because of Obamacare requirements.
Politico reported President Obama told insurance company CEOs that there will be no federal financial aid to help them restore the policies.
Last week, popular outrage prompted Obama to grant a waiver that allows individuals to keep the policies that were scheduled to be cancelled after 2014. Reviving these polices could be costly, because companies will have to get the approval of state insurance regulators in order to restore the cancelled coverage.
This announcement had a negative impact on some health insurance stocks. The share price for UnitedHealth Group (NYSE: UNH), which issues large numbers of the cancelled individual plans through its Golden Rule subsidiary, was down .39 percent in mid-day trading on Tuesday.
On the other hand WellPoint (NYSE: WLP), which issues such plans through its Blue Cross Blue Shield network, saw its share price increase by 2.41 percent or $2.18. The share price for Aetna (NYSE: AET) was down by .37 percent -- but Cigna (NYSE: CI) saw its share price increase by .64 percent.
It looks like Obamacare could have an impact on the revenue of health insurance companies. Unfortunately the size and scope of that impact isn't known yet.
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