The impact of ObamaCare on doctors and patients, companies inside and outside the health sector, and American workers and taxpayers
Health insurance companies are bailing and co-ops are failing as Obamacare barrels down the road to collapse.
Grace-Marie Turner, president of the free-market Galen Institute, said Aetna’s decision is surprising because the company’s leadership has been so supportive of the Affordable Care Act. But she said the firm, like others, has found it difficult to stay profitable amid rising costs caused by regulations under the law and loopholes that allow customers to game the system.
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Aetna is pulling out of 11 of the 15 states it serves on the Obamacare exchanges. Longtime readers of this column will be unsurprised at the reason: It’s losing substantial amounts of money on its exchange policies.
That’s not necessarily the only reason, of course. Companies in heavily regulated industries — and health care is now probably our most heavily regulated sector outside of nuclear power plants — spend a lot of time engaging in n-dimensional chess games with the various government entities that have jurisdiction over their operations. Public statements and market moves may be exactly what they look like. Or they may be part of a complicated strategy involving some third, fourth or eighth factor that does not, at first glance, appear to be much related.
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Talk about climate deniers, just how much worse does it need to get before all of the Obamacare defenders are ready to concede this isn’t working.
This has been an awful summer for Obamacare.
Here are just a few of the headlines:
Aetna has been a stalwart of confidence for Obamacare. That confidence took an abrupt and sudden turn this week when it cited unsustainable losses as the reason it was cutting back from 15 states to only four. Aetna reported Obamacare losses of $200 million in just the second quarter and more than $430 million since January of 2014. They expect full-year exchange losses of $320 million in 2016 alone.
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Donald Trump and other Republicans Tuesday cast a decision by a major insurer to sharply cut back participation in Affordable Care Act exchanges as evidence that the new system is collapsing and should be replaced.
Democrats continued to defend the law as much better than the old system, but said the news that Aetna Inc. will withdraw from 11 of the 15 states where it currently offers plans could create an opening for changes proposed by Hillary Clinton, such as her proposal for a government-run option to compete with private insurers.
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The decision by the nation’s third-largest health insurer to pull out of the Affordable Care Act’s exchanges in nearly a dozen states is a double whammy to President Barack Obama’s signature health law, increasing financial strains on the program while dragging the debate over its merits into the presidential campaign.
Republicans opposed to the law immediately pointed to Aetna Inc.’s decision, which followed similar moves by other major insurers, as evidence that the law isn’t working as intended and sought to rally voters. Donald Trump’s presidential campaign labeled the Aetna move a sign that “this broken law…is slowly imploding under its regulatory red tape.”
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Aetna’s pullback from the Affordable Care Act’s (ACA) Insurance Exchanges is another bad omen in a growing list. Throughout the controversial history of Obamacare, Aetna has been a stalwart continuing to voice confidence in the future of the program.
Until we are willing to have a conversation about how to fundamentally change a failing program Obamacare is just going to continue to deteriorate. That won’t happen until supporters end their denial and Republicans admit they can’t turn back history.
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The Affordable Care Act (ACA) has produced massive consolidation among health care providers, largely the result of hospitals merging and large hospital systems taking over private doctor practices. In response and in an apparent attempt to improve their negotiating position with the consolidated providers, four of the five major for-profit health insurance companies have proposed mergers: Aetna with Humana and Cigna with Anthem. The Department of Justice (DOJ) has moved to block the mergers, citing a growing threat to health care market competition.
Before making that decision, the DOJ asked Aetna, and likely the other insurers as well, how DOJ action to challenge the merger would affect the insurer’s decision to participate in the ACA exchanges.
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Democrats claimed for years that ObamaCare is working splendidly, though anybody acquainted with reality could see the entitlement is dysfunctional. Now as the law breaks down in an election year, they’ve decided to blame private insurers for their own failures.
Their target this week is Aetna, which has announced it is withdrawing two-thirds of its ObamaCare coverage, pulling out of 536 of 778 counties where it does business. The third-largest U.S. insurer has lost about $430 million on the exchanges since 2014, and this carnage is typical. More than 40 other companies are also fleeing ObamaCare.
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Could it be that the highly compensated insurance-company actuaries are lousy at math? For months, we’ve been reading stories about how big medical bills incurred by Obamacare enrollees are driving publicly traded insurance companies from the exchanges. Some affiliates of the venerable Blue Cross Blue Shield Association (BCBS), reeling from the costs of paying medical claims for a population that is unhealthier than expected, have joined the stampede to the Obamacare exits, while others seek premium increases of as much as 60 percent or sue the government for corporate handouts to offset their losses.
The apparent desperation of insurance-company CEOs might lead you to believe that Obamacare was failing. Not a chance, according to the Centers for Medicare and Medicaid Services.
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