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There were winning & losing payers in the 1st year of ACA: 6 things to know

The Commonwealth Fund found most insurance companies lost money in the first year of the Affordable Care Act health insurance exchange markets.

"All well-functioning markets have winners and losers, so it should be no surprise that some health insurers failed to succeed in the ACA's reformed market, especially during the first year," concluded the report authors. "As insurers gain greater experience with these new conditions, it can be expected that their actuarial precision will improve and that large differences in financial performance will diminish."

Here are six key notes:

1. Insurance companies made more money — nearly twice as much from health premiums in 2014 — the overall profits diminished due to higher payouts.

2. The health insurance companies underestimated total medical costs by around 5.7 percent with about 25 percent of insurers underestimating claims by 35 percent on average.

3. Some companies were able to offset losses through reinsurance payments from the federal government for high-cost patients. The reinsurance credits were about 50 percent higher than the original estimation and the federal government modified the reinsurance payment formula in mid-2014 to become more favorable for insurers.

4. The medical claims were only 2 percent higher than insurers expected in the first year after reinsurance payments. The report recommended t he federal government extending the reinsurance program until the marketplace matures.

5. Medical claims and administrative expenses increased more than premiums in 2014, according to the report. Insurance companies' overall profits diminished from previous years, especially in the individual market where companies reported 4.2 percent underwriting loss, three times greater than the previous year. The profit margin was 1 percent overall.

6. The best performing insurance companies reported individual market profit margin of 8.5 percent in 2014; the worst performing insurers had a 21.8 percent loss on the year.

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