Freefall

Aetna drops out of ObamaCare exchanges in 11 states

Remember when Democrats, still in the midst of shoving ObamaCare down the throats of an unwilling nation, argued that it would actually be “market-based”? Democrats don’t know anything about how truly free markets work, of course, but their argument was that the ObamaCare exchanges were basically competitive marketplaces in which consumers could shop for the insurance that would make sense for them. OK, granted, it’s a marketplace operating under the artificially imposed and completely insane parameters imposed by the government. And OK, what we commonly call health “insurance” isn’t really anything like a real insurance product. And OK, the role of pricing in this “marketplace” is complete contorted because the taxpayers subsidize purchases people make but cannot really afford.

But leave that aside. It was kind of sort of a marketplace that offered options. But that would only be true as long as the companies participating in the marketplace stayed on board. You know what would destroy that, though? If insurers abandoned the exchanges. And you know what would cause that to happen? The insane economic parameters of ObamaCare, which would attract a disproportionately sick and poor clientele that would make it impossible for insurers to break even, let alone make a profit. And as we’ve been telling you in this space, that is happening with the strength of a tidal wave. Today, a big whitecap broke on the beach: Aetna’s announcement Monday night was the latest sign that large insurers are losing money in the Affordable Care Act’s marketplaces, heightening concerns about the long-term stability of a key part of Obama’s domestic policy legacy. But addressing this issue could open the door to a nasty political fight, given that some Republicans have vowed to repeal the law outright. If insurers continue to lose money, more are likely to withdraw from the marketplaces, a move that would reduce choices for consumers and could contribute to higher premiums. In one county, Aetna’s exit in 2017 could leave no insurers offering policies through its marketplace.

Aetna said it will exit 11 of the 15 states where it offers coverage through the Affordable Care Act, widely known as Obamacare. That affects about 80 percent of its customers covered through insurance marketplaces. The marketplaces, known as insurance exchanges, were created to provide coverage for Americans who cannot get affordable health benefits through a job. A key aspect of the health-care law, the marketplaces allow people to purchase insurance online with subsidies based on their income. Earlier this month, Humana said it will cut back its participation on the exchanges from 15 states to 11. On an earnings call in July, UnitedHealth Group chief executive Stephen Hemsley announced that his company plans to remain on “three or fewer exchange markets.” In a reversal of expectations, Anthem said it is projecting mid-single-digit losses on the individual plans it sells on the exchanges for 2016. And Cigna has said that it is losing money on the exchanges, although the insurer is planning to expand its marketplace presence to three new states in 2017.

Insurers no longer have the options of remaining in the exchanges, losing a fortune and getting rescued by the taxpayers Remember, the original draft of ObamaCare included a fund with which the federal government would bail out the insurers if when this happened. Those of you who don’t like Marco Rubio should send him flowers, because he got that provision removed, which means the insurers no longer have the options of remaining in the exchanges, losing a fortune and getting rescued by the taxpayers. The financial implosion of ObamaCare was inevitable. The entire law was build on a fantasyland economic model that could never work in real life. You cannot price-control premiums while guarantee coverage regardless of health and expect anyone to make any money. The mystery is why the insurers got behind ObamaCare in the first place. I get the part about how they thought the individual mandate would drive all kinds of new customers to them. But did they really not understand what these markets would look like when fully formed? I get that the Democrats know nothing about business and thought their fantasyland vision would become reality. But health insurers presumably knwo their own market. You’d think they could have seen this coming. Well, they see it now. And soon the vaunted “marketplace” of ObamaCare will exist in theory only, because shoppers can’t shop if no one is open for business. By the way, you realize how Hillary will propose to fix this, right? I’d suggest you #NeverTrumpers get over yourselves quickly and do what’s necessary to stop her from having the chance.



Dan Calabrese -- Bio and Archives Dan Calabrese’s column is distributed by HermanCain.com, which can be found at HermanCain Follow all of Dan’s work, including his series of Christian spiritual warfare novels, by liking his page on Facebook.

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