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Tuesday, August 16, 2016

Now It's Aetna's Turn

What comes next in this sequence:  Co-ops, Humana, United Healthcare __________?

The answer is Aetna.  The sequence is the list of health insurers that will no longer be offering insurance on most Obamacare exchanges.  Aetna announced that it is pulling out of more than ten states for 2017.  It is a catastrophe for Obamacare.

The idea of the Obamacare exchanges is that they offer a place where insurers can compete for customers.  The customers easily get to see each plan next to the others and then to purchase insurance with federal subsidies.  The plans must meet a long list of requirements so that they are very similar.  The problem, however, is that because of all the restrictions and requirements of Obamacare, it is nearly impossible for insurance companies to sell policies on the exchanges that are profitable.  First the new co-op insurers failed.  Then Humana and United Healthcare pulled out of most states.  Now Aetna is doing so.  It really is not much of an exchange if there are only one or two plans offered.  With the Aetna departure, there are actually some place in the USA where not a single insurance carrier is offering policies for next year.

Obamacare is melting down.  Premiums for the few policies that will be offered on the exchanges are soaring, but even so, there are few choices.  The number of people buying insurance on the exchanges has fallen way below projections.  The care that the insurance provides is substandard because many good hospitals and doctors are out-of-network and because the deductibles are so huge that for many people it is the same as being uninsured.  In essence, the entire increase in coverage that came from the Obamacare law is the result of wider Medicaid coverage and not the complicated and expensive exchanges.  It is the disaster that was predicted when Obamacare was being debated.

So what would the presidential candidates do about this?  Trump is clear; he wants to get rid of Obamacare.  He would let companies offered tailored policies and to do so across state lines.  He would keep community rating which means those with serious health problems cannot be excluded from the insurance pool.  Hillary Clinton says that Obamacare is a success and should be expanded.  That's much like saying that the Zika virus is a success and should be expanded.  The system is imploding and Hillary is just lauding its "success".  It's another instance of Hillary Clinton ignoring reality for ideology no matter the consequences for the American people.

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