Obamacare’s exchanges could soon be out of health insurers.
This month, UnitedHealth – the largest U.S. insurer — announced that it would no longer sell exchange plans in New Jersey in 2017. It has now withdrawn from 27 states. Last year, UnitedHealth lost about $475 million on the exchanges; this year, it’s projecting $500 million in losses.
The story is similar for other insurers. Many have decided to abandon markets they have long served. That’s left people fewer options for coverage. And with less competition on the exchanges, the plans that remain have more freedom to hike premiums.
Obamacare’s ongoing dysfunction is bad enough. But the looming collapse of its exchanges is prompting calls for even more government involvement in healthcare — even a single-payer system.
It takes a special kind of reasoning to respond to the spectacular failure of government that is Obamacare by calling for, well, even more government.
Health insurance companies lost as much as 11% on their exchange plans last year. That’s more than double the amount they lost during the exchanges’ first year.
Insurers have responded by heading for the exits. UnitedHealth will now only sell health plans in three states. Humana abandoned several markets after posting a 46% drop in earnings. Premera Blue Cross will leave Oregon and a dozen counties in Washington State.
Thirteen of Obamacare’s 23 state-sponsored CO-OP health plans have failed. Consequently, no less than 740,000 people have had to scramble to find new coverage.
Folks in Alabama and Alaska had access to at least seven insurers before Obamacare. Next year, they’ll have just one. The same will happen for those living in many parts of Arizona, Kentucky, Mississippi, Oklahoma, and Tennessee.
Insurers that have remained on the exchanges are pushing for double-digit premium hikes. Former Centers for Medicare and Medicaid Services chief Marilyn Tavenner, who now heads insurer trade group America’s Health Insurance Plans, recently said that premiums in 2017 will likely be higher than in 2016.
UnitedHealth wants to raise premiums for its exchange plans in New York 45.6%. The average rate-hike request for 2017 in the Empire State is more than 17%.
Humana has put in for a 50% jump for its “low-cost” silver plan in the Detroit metro area. If approved, a 40-year-old making $35,000 would have to pay almost $5,000 a year in premiums. And that doesn’t account for the plan’s substantial deductible.
The list goes on. All but one insurer have put in for double-digit premium increases in Oregon. Humana has requested an average hike of 65.2% in Georgia. If Highmark gets its way in Pennsylvania, its customers will pay 38% more.
And because insurers have lost so much money on the exchanges thus far, state regulators are likely to grant these rate hikes. If they don’t, even these insurers may leave.
Obamacare’s supporters insist that these premium spikes don’t matter. As a spokesperson for the Department of Health and Human Services said, the final rates are “not a reliable indicator,” since Obamacare’s subsidies obscure the actual cost of a plan for many consumers.
But these subsidies don’t apply to millions of middle-class people. To afford premiums, many must cut other parts of their household budget — or go uninsured.
The Obama administration promised that this wouldn’t happen. The White House said that Obamacare would “curb excessive premium growth for . . . millions of Americans.” It said that requiring uniform benefits, banning companies from denying coverage to the sick, and creating online exchanges would yield a marketplace where insurers competed on price and quality. Everyone would benefit.
So were the expectations of Obamacare’s architects off the mark? Or did they know that the reform package would follow the historical precedent of several states — like Kentucky and New Hampshire — that unsuccessfully implemented Obamacare-like insurance regulations in the 1990s?
Some on the left seem secretly delighted that Obamacare is failing. Sen. Bernie Sanders, D-Vt., has advocated replacing Obamacare — and all private insurance — with a single-payer, Medicare-for-All system. He’s pulled Democratic front-runner Hillary Clinton, a longtime supporter of Obamacare-style healthcare reform, closer to his point of view as well. She recently called for a “Medicare-for-More” program that would stuff those over the age of 50 or 55 into the federally run health program for seniors.
It’s piecemeal single-payer.
Obamacare is faltering. No matter who wins in November, the next president will face a genuine crisis of the current president’s making.
And it defies logic to attempt to correct this entirely predictable failure of government with “fixes” that give the federal government even more control over Americans’ healthcare.