The end is near for Obamacare, as Aetna drops out:
Aetna (NYSE: AET) is sharply cutting its participation in Obamacare exchanges for 2017.
The health insurer said it will offer individual Affordable Care Act exchange plans in just four states, down from 15 this year, in an effort to reduce its losses.
You see, the Patient Protection and Affordable Care Act has led to unhealthy people being covered by insurers. And they’re driving the insurance companies broke.
Aetna’s announcement comes two weeks after the company booked $200 million in ACA-related pretax losses in its Q2 earnings report…
That makes 3 of the 5 members of the health care cartel who have dropped out of Obamacare, as Humana and UnitedHealthcare previously left the Obamacare exchanges.
Humana has also announced it will sharply cut back from the exchanges. Its pullback, in the wake of UnitedHealth (NYSE: UNH)‘s departure from all but a handful of exchanges, means that hundreds of thousands of Obamacare plan members will no longer have access to plans from the nation’s three major insurers in 2017.
At this point, it doesn’t matter if the Republicrats in Congress vote to repeal Obamacare. It’s falling apart on its own. But reality is a harsh mistress, and some people are dealing with Aetna’s announcement by closing their eyes, sticking their fingers in their ears, and loudly proclaiming that they can’t hear it.
“Aetna’s decision to alter its Marketplace participation does not change the fundamental fact that the Health Insurance Marketplace will continue to bring quality coverage to millions of Americans next year and every year after that,” Kevin Counihan, federal ACA marketplace CEO, said in a statement.
Of course Mr. Counihan is spinning Aetna’s actions as not changing anything. He’s going to be out of a job soon, and he needs time to update his resume.
“It’s no surprise that companies are adapting at different rates to a market where they compete for business on cost and quality rather than by denying coverage to people with preexisting conditions,” Counihan said.
Except that they’re not competing on cost, you twit. The amount of reimbursements for costs are capped by the PPACA, which is why health insurance premiums have gone through the roof.
Bertolini said the problem is that ACA plan members tend to incur high medical costs, while the federal risk adjustment program meant to offset losses on those members has not been adequate. As a result, many insurers are losing money on the exchanges.
“More than 40 (health insurance) payers of various sizes have similarly chosen to stop selling plans in one or more rating areas in the individual public exchanges over the 2015 and 2016 plan years, collectively exiting hundreds of rating areas in more than 30 states,” he said.
You can’t remain in business when you are losing money. Of course, government stoolies don’t understand that because they are used to just raising taxes and/or fees when they run out of money. The health insurers don’t have that option.