Friday, May 26, 2017

Aetna to pull out of Obamacare exchanges

Aetna Ditches Obamacare Because the Health Law Is Broken - Hit & Run : - Peter Suderman:

May 11, 2017 - "Insurance giant Aetna announced yesterday that it would cease selling health coverage in Obamacare's insurance exchanges entirely.

"The reason, according to a statement from the company, was the projection of continued massive financial losses, and the poorly designed structure of Obamacare's exchanges. The company, which had already announced plans to scale back participation in the law, said it was projecting losses of about $200 million this year, and that 'those losses are the result of marketplace structural issues that have led to co-op failures and carrier exits, and subsequent risk pool deterioration.' The individual market created by Obamacare relies on the participation of both individuals and insurers. But Aetna, at least, is arguing that the market is fundamentally flawed — and refusing to participate as a result.

"Aetna's exit is yet another reminder of the growing instability that exists within the individual market system created under Obamacare.... Most of the non-profit insurers created under the law have failed and shut down. Beyond Aetna, most of the nation's major insurance companies have scaled back participation in the exchanges. In states such as Maryland, Virginia, and Connecticut, health insurers have already put in requests for large rate hikes during the coming year. In much of the country, there is only one insurer selling plans under the health care law.

"Whether or not Obamacare's exchanges are in a death spiral, technically speaking, it's clear that there is a tremendous amount of volatility in the system. That volatility is likely to result in widespread disruption to individual health coverage arrangements, whether through higher rates or lost coverage and forced plan switching. What that means is that Obamacare is almost certainly not sustainable in its current form, because the politics of health care revolve — arguably more than anything else — around the disruption of health coverage and services. If current levels of instability persist, public dissatisfaction will almost certainly force change on the system.

"This is one reason why the House GOP's legislation, which would rewrite Obamacare while leaving the core structure of its individual market mechanisms in place at the federal level, is so problematic. Its reforms would do little to quell Obamacare's instability. It might even exacerbate the health law's existing problems. And it would do so in a way that addresses few if any of the deeper structural issues with the American health care system."

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