Category: Implementation

The push is on in Colorado for a universal health care system. But can the state afford it?

Amendment 69, which will be on the Nov. 8 ballot this fall, would “replace most private health insurance in the state — including Colorado’s Obamacare exchange — with universal coverage overseen by an elected 21-member board,” according to a report in The Denver Post.

Sure sounds like sunshine and roses, and there are a lot of people fighting for it. But a new analysis shows the system would be in the red to the tune of as much as $8 billion — by the 10th year of the program.

. . .

Another day, another healthcare co-op failure. In July alone, three co-ops, HealthyCt in Connecticut, Community Care of Oregon, and Land of Lincoln in Illinois announced they are closing up shop. They join 13 other failed co-ops out of the original 23 that were a centerpiece of the Affordable Care Act’s vision for the future of healthcare organization — an unrealistic vision based on wishful thinking and sabotaged by the ACA itself.

The ACA created Consumer Operated and Oriented Plans (co-ops) — private, state licensed, non-profit health insurance companies — to provide low-cost, consumer friendly coverage to individuals and small businesses. The theory was that since the co-ops didn’t have to show a profit, they could charge lower premiums, provide more services and be more responsive to their members. They would use collective purchasing power to lower administrative and information technology costs and keep members healthy through preventive care and evidence-based medicine.

. . .

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.

. . .

Humana recently announced that next year it is withdrawing from 88% of the counties where it sold Affordable Care Act (ACA) exchange plans this year. United Healthcare forecasts higher earnings in 2017, stemming in part from its decision to shut down most of its exchange business. Aetna has cancelled plans to expand its ACA market footprint and is instead reevaluating its current participation. At least four states, Alaska, Alabama, Oklahoma and Wyoming will likely have only one exchange insurer this coming year. Sixteen of the 23 co-ops initiated with ACA funding have collapsed. And researchers supportive of the ACA estimate that insurers are requesting average gross premium increases of 23% next year These data points suggest the ACA’s individual market changes are faring poorly thus far.

. . .

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.

. . .

Weeks after announcing a new “relationship-based” health insurance plan that would provide patients unlimited access to health coaches and primary doctors with no co-pay, Harken Health Insurance withdrew its application to open in South Florida in 2017.

Harken’s withdrawal further narrows the number of health insurance choices for customers who qualify for federal subsidies under the Affordable Care Act exchanges. Just seven companies or their affiliates have plans pending state approval, according to the federal site healthcare.gov. The nation’s largest health insurer, Harken parent company UnitedHealth, has pulled out of ACA exchanges in 31 states, including Florida.

. . .

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.

. . .

It’s hard to exaggerate the alchemy of distortions that are turning ObamaCare into such a pending disaster that big insurers like Aetna, Anthem, Humana and UnitedHealth Group,once supporters, can’t cut back their participation fast enough.

ObamaCare was always going to be a questionable deal for taxpayers if the only people who signed up were poorer people whose premiums were largely paid by taxpayers. That was fine as far as insurers were concerned. They can make a profit even if taxpayers are the only ones paying.

. . .

Humana is the latest health insurer to significantly pull back its participation selling subsidized individual coverage under the Affordable Care Act, announcing plans to scale back next year to “no more than 156 counties” across 11 states.

The decision means Humana will reduce its Obamacare geographic presence by nearly 1,200 counties from the 1,351 counties across 19 states where the insurer currently sells individual coverage on exchanges under the health law now. UnitedHealth Group is scaling back to three states and Aetna said this week it was evaluating its participation in 15 states and wouldn’t expand to new states next year.

. . .

July has been rough for Obamacare’s non-profit co-op health plans. Four closed after running out of money — three in just one week. Just seven of the original 23 co-ops are still standing. Those seven all lost money last year — and may yet go out of business before the calendar turns to 2017.

All that failure has been pricey. Taxpayers are out $1.7 billion in federal loans that these co-ops will never pay back.

The co-ops stand out as perfect examples of how Obamacare’s idea of government-managed “competition” is doomed to fail.

. . .