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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Over the past year, a new wrinkle has emerged. Federally subsidized co-ops included in the ACA after the defeat of the government-payer “public option” began failing rapidly when Congress limited their potential subsidy to taxes collected through the ACA. Most of them have now closed after having lost access to nearly unlimited amounts of red ink in the HHS budget. Joining them are a growing number of private insurers, unhappy about the losses they continue to absorb in Obamacare exchanges.

In short, the individual markets keep marching closer and closer to collapse. Whether or not the imposition of a single-payer system on all Americans in a crisis was the secret plan all along for ACA advocates, the existential crisis for this market is nearly upon us. This is the time to spring socialized medicine in the US, right?

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“Last week, I outlined eight possible futures for Obamacare. By curious coincidence, few of them looked like the paradise of lower premiums and better care that the law’s supporters had promised. In the best case scenarios, they looked more like what critics had warned about — “Medicaid for all,” or fiscal disaster, or a slow-motion implosion of much of the market for private insurance as premiums soared and healthy middle-class people dropped out.

What I did not explore was why we seem to have come to this pass — which is to say, why insurers seem suddenly so leery of the exchanges and why premiums are going up so much for Obamacare policies. No one really seems to know exactly why insurers are having so much trouble in the exchanges. . . .”

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OF ALL the big health-insurance companies, Aetna may have been the last anyone expected to pour cold water on Obamacare. The company has over the past several years enthusiastically participated in the marketplaces the law created. Now, Aetna just announced, it is canceling plans to expand its Affordable Care Act (ACA) business and reviewing its existing products.

Aetna is not alone. UnitedHealth Group and Humana have recently made announcements in a similar vein. Among other things, many big insurers complain that their Obamacare divisions are losing money, requiring them to pay out more in medical bills than they collect in premiums. The law’s critics have seized on the news, using it as fresh evidence that Obamacare is deeply, perhaps fatally, flawed.

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Twenty-three co-op plans, funded with $2.4 billion in government loans, opened enrollment in 2013. By the end of 2015, 12 plans had failed, leaving $1.3 billion in delinquent loans, more than 700,000 people in 13 states scrambling for coverage, and hospitals and doctors with hundreds of millions of dollars in losses uncovered by the assets of the failed co-ops.

This result is hardly surprising. The people running the co-ops had no experience running an insurance company – co-ops were forbidden to have anyone affiliated with insurers on their boards. Their premiums were too low and their benefits too high. The failed co-ops went on to lose $376 million in 2014 and more than a billion in 2015. Only one co-op turned a profit in 2014, and all lost money in 2015.

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Aetna’s decision to abandon its ObamaCare expansion plans and rethink its participation altogether came as a surprise to many. It shouldn’t have. Everything that’s happened now was predicted by the law’s critics years ago.

Aetna CEO Mark Bertolini said that this was supposed to be a break-even year for its ObamaCare business. Instead, the company has already lost $200 million, which it expect that to hit $320 million before the year it out. He said the company was abandoning plans to expand into five other states and is reviewing whether to stay in the 15 states where Aetna (AET) current sells ObamaCare plans.

Aetna’s announcement follows UnitedHealth Group’s (UNH) decision to leave most ObamaCare markets, Humana’s (HUM) decision to drop out of some, Blue Cross Blue Shield’s announcement that it was quitting the individual market in Minnesota, and the failure of most of the 23 government-created insurance co-ops.

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House Speaker Paul Ryan’s health care blueprint, released late last month as part of his “A Better Way” reform agenda, would deliver affordable, accessible health coverage at less cost and with less disruption to the health care market than Obamacare. Ryan’s plan would slash premiums by, among other things, getting rid of Obamacare’s costly essential-health-benefit mandates. People would be free to purchase low-cost plans that don’t cover procedures they don’t want or need. The plan would also make health coverage more affordable for middle class families by replacing Obamacare’s complicated scheme of subsidies with more straightforward, age-based, refundable tax credits.

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CBO projects that the combined federal spending on Social Security, Medicare, Medicaid, and the ACA subsidies will grow from 11 percent of GDP in 2016 to 16.3 percent of GDP in 2046. This run-up in spending will increase annual federal budget deficits and push cumulative federal debt to 141 percent of GDP in 2046 — well past the point that most economists would consider dangerous for the economy. (Spain’s debt is 99 percent of GDP in 2016).

CBO’s base case scenario is also probably too optimistic. CBO’s projection assumes federal revenue will grow from 18.2 percent of GDP in 2016 to 19.4 percent in 2046 (the 50-year average of federal revenue, from 1966 to 2015, was 17.7 percent of GDP). But the projected growth in federal revenue derives from tax provisions that are sure to change in coming years. For instance, under the ACA, a new 3.8 percent tax was imposed on non-wage income for persons with incomes over $200,000 annually and on couples with incomes over $250,000 per year. These thresholds are not indexed, which means more and more taxpayers, and, eventually, the middle class, will pay this tax as their incomes grow naturally with inflation.

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Democratic and Republican governors know that rising health care costs are increasingly restricting spending on other state priorities. Paul Howard, Director of Health Policy at the Manhattan Institute, outlines five strategies that innovative governors can use to help transform state health care markets: 1. Incorporate reference pricing for common procedures and tests into state benefit designs, 2. Ban anti-tiering provisions, 3. Drive price transparency by setting up an all-payer claims database, 4. Expand access to direct primary care, and 5. Repeal regulations that hamstring competition, such as certificate of need laws and prohibitions on the corporate practice of medicine.

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