Last November, when UnitedHealth Group said it expected to post big losses on its Obamacare policies in 2016, rivals such as Anthem and Aetna signaled their Affordable Care Act businesses were doing fine. The Obama administration used that as evidence to refute claims that systemic problems were brewing in its landmark insurance program.

Now, there’s no denying it. The four biggest U.S. health insurers admit they’re each losing hundreds of millions of dollars on their Obamacare plans. Rather than expand coverage, many are pulling out of the exchanges that were set up by the ACA so people can shop for insurance plans, often with the help of government subsidies.

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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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The insurance marketplaces created under the Affordable Care Act face some similar challenges that public insurance programs have faced as they’ve gotten off the ground.

Steps that were taken to stabilize Medicare Advantage and Medicare Part D could be a starting point to stabilize the ACA insurance exchanges, a policy brief released Tuesday by the Robert Wood Johnson Foundation suggests.

The report comes a day after Aetna announced it would not offer policies in most exchange markets in 2017 where it has offered plans this year, becoming the latest major insurer to do so. Scrutiny has increased around the exchanges since major insurers including UnitedHealth and Humana have announced they would pull back from from the exchanges for 2017.

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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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Late Monday evening, health insurer Aetna confirmed a major pullback from Obamacare’s exchanges for 2017. The carrier, which this spring said it was looking to increase its Obamacare involvement, instead decided to participate in only four state marketplaces next year, down from 15 in 2016. Aetna will offer plans in a total of 242 counties next year — less than one-third its current 778. Coupled with earlier decisions by major insurers Humana and UnitedHealthGroup to reduce their exchange involvement, Aetna’s move has major political and policy implications

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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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