Despite the successes of ObamaCare claimed by President Obama in a recent op-ed to the Journal of the American Medical Association, reality keeps telling a different story. The latest reality is healthcare insurer Aetna just announced it is cancelling plans to expand its business on the ObamaCare exchanges in 2017.
Aetna, the most bullish of the healthcare insurers until now, admits it expects to lose more than $300 million this year on the exchanges. Currently they sell plan on the exchanges in 15 states and had planned to join another five. But now it says it will undertake “a complete evaluation of our current exchange footprint, as the poor performance of these products warrants such an analysis,” according to CEO Mark Bertolini.
This reflects a change in attitude from as recently as April this year when Bertolini called ObamaCare “a good investment.” In January he spoke of the importance of achieving “universal coverage” and suggested this social mission helped offset the company’s losses on the exchanges for ObamaCare in its first two years.
In other words, Mr. Bertolini was patting himself on the back for supporting this liberal nirvana until the economic reality of staggering losses reminded him that he had an obligation to his stockholders to make a profit. Now, after repeating these same themes, he says, “at the same time, we are committed to being good stewards of our balance sheet.” Bertolini, unlike Obama, must eventually acknowledge reality.
Aetna is certainly not alone in coming to this acknowledgement of reality. UnitedHealth Group, the nations’ largest healthcare insurer, conceded they were suffering huge losses as early as last November.
Then, in April, UnitedHealth announced plans to exit the ObamaCare exchanges in almost all 34 states they currently serve beginning in 2017. Chief Executive Stephen J. Hemsley said that the “smaller overall market size and shorter-term, higher-risk profile within this market segment continue to suggest we cannot broadly serve it on an effective and sustained basis.”
In an earlier blog (UnitedHealth Drops ObamaCare) I said:
“With the exit of UnitedHealth from the exchanges, many states will be left with only two or even one insurer available. An analysis by the Kaiser Family Foundation found that in 532 counties, UnitedHealth’s departure will mean two insurers are left, and in 536 counties there will be only one insurer available. The Wall Street Journal editorial board says this will leave only 48% of all counties served by three or more insurers while 24% will be served by only one.”
“This scarcity of competition will undoubtedly be exploited by the remaining insurers, allowing them to raise their already high prices. Even worse, the end of the bailout provisions of the law in 2017 will force insurers to pass along the true cost of ObamaCare insurance for the first time. Get ready for much higher out-of-pocket expenses when the 2017 rates are announced.”
With the retreat of Aetna, this situation just got worse.
The Wall Street Journal editorial board summarizes the matter:
“As long as command-and-control liberals are in charge of U.S. health care, companies that put their trust in government can’t serve their shareholders. It’s a tragedy the health insurance lobby lied to itself and its shareholders about this reality when it supported ObamaCare in 2010.”