The ObamaCare Meltdown Continues
Massive losses, mergers, cancellations — all of it just keeps getting worse.
ObamaCare is back in the news — and none of it is good.
Earlier this month, Aetna became the latest of the nation’s five largest health insurers to stop expanding its ObamaCare coverage. Just like Anthem, UnitedHealthcare, Cigna and Humana, Aetna is projecting significant losses going forward.
It wasn’t supposed to be this way. As Aetna CEO Mark Bertolini explained, 2016 was supposed to be a break-even year for the company’s ObamaCare business. Yet so far, Aetna has lost $200 million, and expects to hit $320 million in losses by year’s end.
Also this month, Anthem, which initially projected ObamaCare success this year, announced it’s expecting “mid-single-digit” losses instead, and CEO Joseph Swedish has told investors the company would be looking for substantial premium increases to make up the difference.
In April, UnitedHealthcare, the nation’s biggest health insurer, announced that in 2017 it will be leaving most of the state exchanges where it operates. CEO Stephen Hemsley explained the company could no longer serve these exchanges on an “effective and sustained basis.” UnitedHealthcare lost $475 million on ObamaCare exchanges in 2015, and could lose another $500 million this year.
In May, Cigna didn’t project profits or losses but said it expected customer reductions in its individual business.
In July, Humana also announced that next year they would service “no more” than 11 state exchanges, down from the 19 states where it sold policies in 2016 — following a staggering $1 billion of losses.
Moreover, the Big Five are attempting to become the Big Three. Anthem wants to take over Cigna, and Aetna and Humana want to merge. Both deals are being held up by the Justice Department, courtesy of antitrust lawsuits.
And then there are — or were — the highly vaunted ObamaCare co-ops. Of the 23 initially established, only seven remain, and six of those are currently on “corrective action plans,” Kevin Counihan, a top official from the Centers for Medicare and Medicaid Services (CMS), told lawmakers.
Plenty of predictions were made about the unsustainability of ObamaCare, but an arrogant president and his Democrat Party colleagues who sold a pack of lies to a “stupid” American public refused to listen. Adding insult to injury the media have now “discovered” the law’s tragic flaw, as in nagging problems that “seem to center on lower-than-hoped-for enrollment, sicker-than-expected customers, and a balky internal stabilization system that didn’t deliver as advertised and was already scheduled to be pared back next year,” NBC reported.
The Hill has also come around, reporting, “The next president could be dealing with an ObamaCare insurer meltdown in his or her very first month.”
In the meantime, a bubble similar to the one that led to the 2008 stock market meltdown has been created. And once again arrogance was an integral part of the equation. Taking care of sick people is big business, and while it has been bad for the insurance companies it was a boon for large, merging health care systems and consolidating physician groups, initially touted as desirable by one of the law’s drafters. Yet as Dr. Thomas McElroy, CEO of Echelon-Health, explains, “[N]o one came around to ask doctors what would happen when the most complicated patients where shuttled to the exchange plans. A small practice can’t survive; that’s why doctors are being bought up by hospital groups or abandoning insurance altogether for membership groups.”
Health insurance expert Joseph Cortelli further notes that all ObamaCare did was mask the problems associated with the reality that 10% of the population drives 80% of claims costs. “Unless government can continue to pump money into these exchanges, the end result is not hard to imagine,” he warns.
That pump isn’t happening. In October 2015, the CMS announced that its “risk corridor” program, one of the mechanisms whereby profitable ObamaCare insurers would bail out unprofitable insurers, would only pay 12.6% of claims. In February, a lawless administration illegally moved $3.5 billion in taxpayer funds intended for the U.S. Treasury to insurance companies.
Even overt malfeasance helped. In 2016, average premiums were up substantially in most states.
Next year? “Insurers in 49 states have submitted their premium requests to regulators, and the average ‘enrollment-weighted’ rate increase, which accounts for market share, is in the range of 18% to 23%, The Wall Street Journal reveals. "The Congressional Budget Office projected 8%.”
Presidential politics is part of the equation as well. The fourth enrollment period for the law begins one week before the election. Last year, the Department of Health and Human Services (HHS) didn’t release the final rates until October 25. If it does the same this year, people will have only days to find a plan before deciding whether to cast their vote for Hillary Clinton and her “more of the same (or worse) approach, or Donald Trump, who might perhaps move to repeal and replace ObamaCare.
Or, the most lawless administration in American history could do what it did before the 2014 mid-terms: delay the beginning of the enrollment period until after the election.
Bottom line: The fourth enrollment period is make or break time. Absent an unforeseen and substantial enrollment of healthy Americans to offset older, sicker ones, a death spiral of fewer insurers charging increasingly higher rates — and thus driving more Americans out of increasingly unaffordable coverage — will be realized.
"I stand by what I said there,” Nancy Pelosi stated in 2013, defending her infamous “we have to pass the bill so that you can find out what is in it” assertion in 2010. “When people see what is in the bill, they will like it.”
They didn’t and they haven’t. Instead millions of Americans have suffered needlessly for progressive hubris.
The best way to fix America’s health care system? Require every government official to be insured by the same program they inflict on the “little people.” Nothing could be more effective than that.