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Sunday, August 7, 2016

The Death Spiral Continues for Obamacare

It seems that the media is too interested in worrying about Melania Trump's immigration status 20 years ago to mention it, but Obamacare is continuing to melt down.  The latest blow came when Aetna, the third largest insurance carrier on the Obamacare exchanges announced that it was reconsidering its participation in them.  Aetna covers over one million people from the Obamacare exchanges. 

Think about what this means.  The Obamacare coops have almost all failed.  There were originally 22 of these new insurance carriers formed.  At the moment, I only one is left and it is on shaky ground.  These coops covered over 20% of the people who got policies on the exchanges, so their departure (through bankruptcy) is a big blow to the program.  United Healthcare, the nation's biggest provider of health insurance has also withdrawn from the exchanges.  It is possible that it will stay in one or two states, but the overwhelming bulk of United's customers will need to find a new carrier for 2017.  Other smaller carriers have also departed from Obamacare's exchanges.  If you add in the Aetna customers, you find that roughly one-third of all people who bought coverage on the exchange are losing their healthplans.

In each case, the departure of the insurance companies from Obamacare exchanges has been due to continuing losses incurred on the insurance.  We all know what continuing losses mean:  higher premiums.  Those who get their coverage on the exchanges will soon be paying substantially more for it.  But that is not all.  In many states, Aetna, United and the coops were the plans that included the first rate hospitals and doctors in their networks.  In New York, for example, if you wanted to have access to the best cancer hospital in the state, you cannot get it if you buy insurance on the network.  That is a very common type of occurrence. 

Put all this together and you find that in the future, people who get insurance on the Obamacare exchanges will be pushed into much more expensive plans but will get much lower quality care.  What's happening is the so called "death spiral" for Obamacare that many of its opponents predicted.

Something major has to be done before the whole system completely collapses and we are left with permanently damaged healthcare.  The media won't talk about it because it might hurt Hillary's election chances.  It can't wait, however.  The nation has to focus on this right now.  Obamacare is failing big time, and there is too much at stake to just sit by and pretend all is well when it is not.

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