The Obamacare Death spiral picks up steam:
- Zero Hedge – Aetna Posts $300 Million Obamacare Loss, Warns May Exit Altogether
- The Daily Signal – This Insurer Used to Make Money on Obamacare Plans. Now It’s Losing Money
A few comments:
No health insurer fell in line behind Obamacare and drank more of the Kool-aid than Aetna. Talk of consideration to leave the Obamacare marketplace is a stunning change in position. It can only be interpreted that Aetna’s views the possibility of future profits to be minuscule.
Aetna’s shift represents a significant revision to its previous position on Obamacare. In April, the insurer said that after a loss last year, it was aiming to roughly break even on its exchange business this year and move toward profitability in 2017. Then, Mr. Bertolini called its position in the ACA marketplaces a “good investment.” The five new states in which Aetna was considering expanding were Maine, Oklahoma, New Jersey, Kansas and Indiana. Not so much anymore: according to Bertolini, “we are evaluating our footprint as it exists today to understand what solutions we can put forward to either fix the business or exit the business.”
Of interest to Colorado readers, you know who you are, is the large increase in premiums Anthem has filed for 2017. We’re talking 25.8 percent. What you don’t see mentioned in the press is they are also withdrawing their PPO plans, leaving the Colorado individual market with only HMO and EPO plans.
Considering the following picture of the Colorado marketplace:
- United Health and Humana are leaving the marketplace
- Rocky Mountain is leaving the marketplace, except for Mesa County (Grand Junction where their HQ is). Also, Rocky Mountain is being purchased by United Healthcare
- Anthem is increasing premiums by 25.8 percent and no longer offering their PPO plans
Folks, this is what a death spiral looks like!
The low cost providers in the individual market will be Kaiser and Cigna. Keep in mind that Anthem is trying to merge with Cigna. There is nothing pretty about the individual insurance market.
I didn’t understand the insurance companies’ enthusiasm for Obamacare. From an actuarial and economic perspective, it made no sense. From a political perspective (for them) it made no sense. I guess the corporate executives didn’t understand this. All they understood was the government telling them they were going to hold off the hordes, and they’d have a guaranteed market if they agreed to this deal, and that they would have guaranteed profits with government coercion to buy their product, and full-faith-and-credit guaranteed subsidies.
Dinesh D’Souza recently came out with another movie. He doesn’t say this in it, but he has said it elsewhere. Saul Alinsky said that corporate America would gladly agree on Friday to government-guaranteed profits for themselves on Saturday, in exchange for financing their political overthrow on Monday. This is basically what’s going on. Only what actually happened was the mere promise of government-guaranteed profits, which didn’t materialize. Obamacare was designed to fail. The purpose is to lead us to the “promised land” of single payer.