Insurance giant Aetna is the latest provider to announce staggering losses on ObamaCare plans — some $300 million last year, in just 15 states.
Soaring costs prompted Aetna to cancel its plans to expand into more states, and the company is “undertaking a complete valuation of future participation in our current 15-state footprint,” as CEO Mark Bertolini put it.
Fox Business quotes Bertolini tiptoeing around the unexpectedly high cost of providing insurance coverage to people who are already sick: “These people need these procedures and they need these drugs and they need to be covered. But when you couple that with a risk-adjustment mechanism for high-risk people, that really is limited by virtue of the legislation, it causes everyone in the system to lose money.”
No one except the designers of ObamaCare actually thought it would be affordable to do that. The notion that insurance companies previously charged high premiums, or withheld coverage, from “high-risk” customers because they were evil and mean and greedy, but now Daddy Obama would make them see the error of their ways, was the dumbest and most expensive political fairy tale of the modern era.
What ObamaCare actually does is socialize the costs of coverage by penalizing healthy people, to the point of outright robbery. In order to keep the peasants from revolting, the true cost of this crackpot program was hidden through “risk corridor” bailout programs. The idea was that the system would go kaboom, because even the jacked-up premiums ObamaCare customers are seeing aren’t really enough to cover the costs, but the financial explosion would be delayed by soaking taxpayers for massive insurance company bailouts.
That’s what Bertolini is asking for when he says he wants to “modify” ObamaCare to “include risk adjustment that allows us to cover more sick people, which is what we want to do.” The CEO of the third-largest insurance company is asking for a bailout, which would be initially paid with magic deficit money, but would become a iron-fisted demand for tax hikes down the road. The illusion of lower premiums today would be financed by higher tax bills tomorrow, and of course they’d never tell you they were raising your taxes to keep the ObamaCare scam floating. They’d tell you it was for bridges, or schools, or Social Security solvency, or something.
Bertolini called for greater honesty about the cost of providing insurance – which is not something we’re ever going to get from any Democrat Administration, for as long as ObamaCare exists.
He also suggested enticing younger people into the insurance market by creating “a separate set of products for them, because they don’t need the kind of intensity that the current people do.” That’s the exact opposite of how ObamaCare works. It’s all about robbing young, healthy suckers, who don’t actually use their health insurance much, to finance benefits for more expensive clients. One of the big reasons ObamaCare is collapsing is that young suckers decided they’d rather pay the trans-Constitutional tax/penalty than spend a fortune on expensive insurance they don’t need.
“Bertolini said the exchanges could work if adjustments were made to the health-care law. In its current form, though, it’s nearly impossible,” writes Fox Business. Gosh, why didn’t anyone tell us that in 2010? Does anyone recall seeing an “ObamaCare can’t possibly work in its current form” presentation at the 2016 Democratic National Convention?
The New York Post notes that insurance companies are now saying the only way they can survive in the new, out-of-control health care marketplace is through mergers.
“Ironically, the only insurer of the top four Obamacare firms that said recently it is happy with the program is Centene Corp.,” which received regulatory approval for a $6 billion buyout of HealthNet in March, according to the Post.
On the other hand, Aetna’s attempt to merge with its rival Humana, and Anthem’s effort to buy Cigna, have both been thwarted by Justice Department anti-monopoly actions. So much for President Obama’s grandiose promises of choice and competition in health care – now we’re hearing that only mergers between titans will allow them to survive, and there are justifiable fears those mergers would eradicate competition.
“The consequence of [Aetna’s] exit would be felt particularly hard in Arizona, where residents of Maricopa County would be left with just two health insurance options – down from eight plans offered in 2016. The crumbling of Obamacare at this alarming rate is simply unsustainable,” said Senator John McCain (R-AZ), as quoted by the New York Post.
Even with all these machinations to hide the real cost of ObamaCare from consumers, premiums are blasting into orbit. Last week, Forbes mulled over conflicting studies about the effects of the Affordable Care Act, and found “overwhelming evidence that ObamaCare caused premiums to increase substantially.”
Everyone knows premiums are going up, of course, but ObamaCare apologists always claim they were going up anyway – why, without the ACA, they’d probably be going up even more! Not so, says Forbes, citing studies that show the “Affordable” Care Act is clearly responsible for the “huge spike” in individual-market costs, with increases of up to 58 percent directly attributable to the law, after controlling for all other forces that would have increased premiums otherwise.
As author Brian Blase notes, the spike is easy enough to see by comparing ACA-compliant plans with the remaining plans that aren’t fully subject to ObamaCare’s mandates, and by disregarding the subsidy programs designed to conceal some of the increase. Furthermore, the studies occasionally cited by ObamaCare defenders include premiums that were kept artificially low to fudge the numbers… as evidenced by the fact that companies like Aetna are losing hundreds of millions of dollars on the ObamaCare exchanges, backing away from them in 2017 as the losses become too painful to bear.
“Who could have envisioned such problems? Not ObamaCare backers. They were endlessly promising that the law would create vibrant, highly competitive markets that would lower the cost of insurance. Critics, however, were spot on. They said that, despite the individual mandate, ObamaCare wouldn’t attract enough young and healthy people to keep premiums down,” write the editors of Investor’s Business Daily, pondering the grim news from Aetna.
IBD observes that none of this should come as a surprise, since the same calamities befell every state program resembling ObamaCare over the past few decades:
The Heritage Foundation, for example, said that under ObamaCare, “many under age 35 will opt out of buying insurance altogether, choosing to pay the penalty instead.” That’s just what has happened.
Critics predicted sharp hikes in premiums and big increases in medical claims. That’s what’s happened.
Critics said people would game the system, waiting until they got sick to buy insurance, then canceling it once the bills were paid, because of the law’s “guaranteed issue” mandate. That’s happening, too. In fact, administration officials are trying to tighten the rules to mitigate this problem.
Critics said insurers would abandon ObamaCare amid substantial losses. Anyone want to dispute that this is happening?
IBD suggests policymakers should listen to these thoroughly-vindicated critics of ObamaCare, and implement reforms that would restore free-market competition… but that would be tantamount to the repeal of ObamaCare that we’ve been sternly lectured is politically impossible.
Instead, what we’ll most likely get is the biggest “merger” of all, in which all of these tottering insurance giants find themselves merging with the federal government, in a single-payer socialist nightmare from which America will never awaken.