Comment: Insurance company bailout? Oh please!

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Insurance company bailout? Oh please!

You can't accuse the insurance industry for the financial structure of the ACA, it's the governments law. They are requiring the insurance companies to broaden coverage and provide policies without caps, for 300 million people! How can actuaries possibly calculate a premium amount? They can't, it's mathematically impossible when there is an infinity factor in the equation. Insurance companies have been sharing risk since the time of the sailing ships and Lloyds of London. All insurance companies insure a portion of their risk through reinsurance, that's how large catastrophic claims like hurricanes are covered. Whats happening here is the government is acting as the re-insurer for the ACA. That's not a bailout.

The question to ask, is why are the existing reinsurance companies not providing the catastrophic reinsurance for the ACA? I think we know the answer, no reinsurance company is willing to risk their capital on this pig, no matter how much lipstick is on it.