Affordable Care Dysfunction

by Penna Dexter, Contributing Author : The Affordable Care Act is proving to be a disappointment to individuals and insurers alike. The more people have to pay for the insurance offered by ObamaCare, the less attractive they are finding it. Americans who don’t have employer coverage were supposed to win with the Affordable Care Act. And some are winning because their incomes are low enough to warrant large subsidies. Others win by gaming the system, waiting until they are sick to get health insurance. Everyone else is wondering what is affordable about the ACA.

When the ACA’s fourth open enrollment period begins in November, many customers will face fewer insurance options and much higher prices. And bigger deductibles than ever.

Across the country insurers have slowly been submitting their proposed rates for 2017 to state insurance commissions. Most are seeking double-digit increases. If these increases are denied or lowered, companies face some tough choices.

Most recently, Aetna, the third largest US insurer, announced it is withdrawing two thirds of its ObamaCare coverage, pulling out of 536 of the 778 counties in which it does business. The Wall Street Journal reports that “more than 40 other companies are also fleeing ObamaCare. The Journal explains that if a company is not a “mega-insurer” ObamaCare’s rising tide of regulations is making it almost impossible to operate.

Among insurance companies, Aetna was the earliest supporter for the passage of the 2010 Affordable Care Act. But it’s been losing money on the exchanges, $430 million since 2014. In hopes that economies of scale might help, Aetna has been attempting to acquire another insurance giant: Humana. The Justice Department is trying to block the $37 billion acquisition.

It’s not just Aetna. All five of the nation’s largest insurers say they are losing money on their ObamaCare policies. Three are pulling back.

One health policy expert says that the average 64-year-old consumes six times as much health care as the average 21-year-old. Under the old system of individual coverage, insurers could charge more or exclude coverage for pre-existing conditions and assess higher rates on older customers. Yes, this created a hardship for certain people. But the solution is worse: higher premiums and fewer options for everyone except the highly subsidized.

The new system needed lots of new takers to sustain itself. Instead, total enrollment this year is about half of the 22 million the Congressional Budget Office predicted. And insurers say the population is sicker than they expected. Healthy people are not enrolling because of the cost. Since there’s no longer a pre-existing condition exclusion, they go without insurance and then enroll when they get sick.

The Journal’s assessment is that, “The entire industry is caught in the law’s structural undertow… the exchanges aren’t attracting enough healthy people to make the economics work.”

These problems are intrinsic. Health insurers dilemmas are no surprise to the Left whose goal all along has been a federal single payer system.
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Penna Dexter is a radio talk show host heard on numerous stations via the Point of View Network endorsed by Dr. Bill Smith, Editor, ARRA News Service

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