Quote of the Day:
It’d be a shame if something terrible happened to that poorly constructed, expensive, low-enrollment, government-run, fabricated health-insurance marketplace scheme that we’re helping you prop up. — Aetna to Barack Obama, basically
–David Harsanyi, The Federalist
Democrats are blaming insurance giant Aetna's pulling out of most of its ObamaCare business on the government's blocking a giant merger with Humana. This outrage has Senator Elizabeth Warren on the warpath. David Harsanyi comments on the blockage theory of the Aetna exit:
If true, this would be the least surprising development in the past six years of Obamacare fiascos. Any giant regulatory scheme bringing together big business and big government inevitably leads to cronyism and corruption.
The Aetna withdrawal is an embarrassment for the administration and just the latest indication that ObamaCare policy choices for citizens are dwindling. Harsanyi quotes a Kaiser study that estimates that by next year 664 counties will have only one insurer on ObamaCare exchanges.
Democrats are claiming that Aetna was trying to extort agreement that it could merge with Humana and a letter obtained by the Huffington Post from Aetna's CEO is being cited as evidence of that extortion. You can read it yourself. Whether extortion or not, that corporations and the government are so cozily tied together is the real concern:
To be honest, although I have little doubt Aetna was hoping its position on the exchanges would help with the merger, the letter sounds less like extortion and more like a sensible decision that any accountable executive would make when his company is facing losses. The real outrage isn’t that insurers like Aetna are abandoning Obamacare, but that companies like Aetna likely participated in Obamacare for cronyistic reasons to begin with.
ACA has inhibited competition, which has only benefited big companies. Still, insurers are losing billions in the exchanges and at some point it’s too expensive to be in bed with Obama. Why would UnitedHealth, the nation’s largest insurer, participate in a program that lost it almost $1 billion in 2015? Aetna lost more than $430 million since January 2014, and it was expected to lose $300 million this year. Merger or no merger, Aetna would almost certainly stay in the exchanges if it made fiscal sense.
At some point cronyism will be the only reason to participate in Obamacare. Democrats will face increasing pressure to make this social experiment work.
But let us look to the future:
Democrats reacted to inevitable news that you can’t regulate affordability into markets by offering even less dynamic ways of “expand coverage.” Hillary Clinton has promised to bring back the “public option,” which is still a euphemism for a government-run insurance program that would be completely detached from the price of health care and, like every similar program, turn into a giant unfunded liability that never stops growing.
You’ll remember also that when debating Obamacare Democrats regularly demonized the insurance industry for profit-mongering (always an overblown assertion). Today, Warren demands that insurance companies lose money to help keep Obamacare solvent. These shortfalls are a hidden taxes collected by insurers and paid for by consumers. For economic patriotism, I guess.
As a welfare program, Obamacare might be a success (insurers that focus on Medicaid sure do well). As a business, though, not so much.
If Hillary Clinton becomes president, Republicans, who have put forward several good, patient-centered, market-oriented health care reform plans, are going to have to fight to prevent health insurance from becoming an unsustainable entitlement.