Obamacare Schadenfreude Dragging On and On

Just put it out of its pain!

Humana says it plans to pull out of Obamacare exchanges in 2018 Health insurance so good they have to make you buy it. Unfortunately, they can't make someone sell it. Aetna CEO on Obamacare: ‘It is in a death spiral’

“We’re in Nebraska. We’re the only plan left in Nebraska,” Bertolini said. He added, “So there isn’t any risk sharing going on in Nebraska. It’s all the risk. It will cost us a lot of money. The top 1 percent to 5 percent of our members, depending on the marketplace, are driving 50 percent of our overall cost structure.” Bertolini went on to say, “There isn’t enough money in the ACA today as a structure, even with it’s fees and taxes, to support the population that needs to be served.”

Asked if this meant Obamacare was “functionally” dead, Bertolini replied, “It is in a death spiral.” “What happens in a population that continues to get riskier and riskier is the rates chase the risk, you try to raise your rates high enough,” he continued. “Last year it was on average 27 percent. What happens is the people who are paying out of pocket for most of it leave because it is becoming too expensive,” he said.

 Two health insurance company mega-mergers collapsed

Two major mergers between leading health insurance companies collapsed today after months spent fighting the government in court. Earlier Tuesday a merger between Aetna and Humana was canceled by mutual agreement. Aetna released a statement from CEO Mark Bertolini lamenting the collapse of the deal. “We are disappointed to take this course of action after 19 months of planning, but both companies need to move forward with their respective strategies in order to continue to meet member expectations,” Bertolini said. Aetna will pay Humana a one billion dollar breakup fee.

Another mega-merger between Anthem and Cigna was canceled several hours later, this one did not end as well. The Washington Post reports Cigna has filed a lawsuit against Anthem.
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With the apparent collapse of both mergers there is now less incentive for the four separate companies to remain in the struggling Obamacare marketplace. Figures release earlier this month by HHS show Obamacare enrollment was well below expectations during the most recent open enrollment period. United Health, the country’s largest insurer and the only one of the top five insurers not involved in a pending merger, pulled out of the Obamacare market last year.

Or maybe they don't need to make you buy it after all: That Obamacare individual mandate may now be… optional?

 According to a report which broke last night at Reason Magazine, there has been no change in the law instituted by Congress but the IRS will be turning a blind eye to the question when you file your taxes this year. Assuming this is true, if you refused to purchase healthcare in 2016 in defiance of the law you may not be in for a showdown with the taxman after all.

By way of the estimable Wombat-socho's "In The Mailbox: 02.16.17", the almost always sensible Megan McArdle details the Rough 24 Hours for Obamacare

The last 24 hours have been one long string of bad news for Obamacare. Tuesday, the insurer Humana announced that it would be pulling out of the exchanges for next year. Then we found out that the IRS had responded to Trump’s executive order on Obamacare by quietly rolling back a new rule planned for this year, which would have required filers to indicate whether they had maintained coverage in 2016 or to pay a penalty. And on Wednesday, word came that Mark Bertolini, the CEO of Aetna, had told a Wall Street Journal conference that Obamacare was in a death spiral. This stands in pretty stark contrast to claims by Andy Slavitt, who ran the Center for Medicare and Medicaid Services under President Barack Obama, that things were shaping up splendidly for 2018, so long as Republicans didn’t screw anything up.
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The exchanges have been struggling for their entire life. There has never been a time at which enrollment was booming beyond expectations, or insurers were making money in aggregate. Whatever frail health the exchanges did achieve required a heroic (also illegal) regulatory juggling act by the Department of Health and Human Services. There’s a good case that the exchanges were going to die anyway, as insurers realized that no matter what they did, many of these markets simply could not be made profitable.

Democrats may respond that the only reason that the exchanges don’t work is that Republicans refused to pass rules that would make them work better. To which Republicans could justly respond that if the law couldn’t work as written, it was probably a bad idea to say “elections have consequences” and ram the thing through on a straight party-line vote over the strenuous objections of voters and the minority party.

The things that needed to be fixed to make the law work were unpopular moves like a higher penalty for failing to comply with the individual mandate -- moves for which Republicans would have paid a price at the ballot box. It takes some pretty brazen chutzpah to say that because Democrats passed an unworkable law to set up what Republicans think is a bad system, Republicans now have a moral obligation to get themselves unelected saving that system, while Democrats take credit for the parts people like.

Regardless of the morality of it, expecting people to actually behave this way is daft. Republicans predictably didn’t lean into the strike zone and help Democrats save the exchanges. If the exchanges are indeed collapsing, Republicans will be striving even harder to avoid being tarred with their failure. As will the Democrats who once hoped they would be running on Obamacare’s triumphs for years to come.

House Freedom Caucus wants Obamacare repeal now, Naw, let it flounder a little longer. IBD has a novel propose: Let's Make Health Insurance Legal Again. An idea so crazy it just might work!

For example, a new invention, "health status insurance," was already sprouting up in the marketplace. This allowed people to insure themselves against the costs of developing a medical condition that would render them otherwise "uninsurable." The ACA banned it.

This kind of ban stalled innovation that has been present in the insurance market since it first started. Insurance was developed in London in the 17th century, offering a way to spread the risks of unforeseen, unpredictable, highly costly events from an individual or business to the larger community. Insurers were able to design and actuarially calculate the price — based upon statistical risks — of an insurance policy to suit virtually any imaginable occurrence. The advent of the ACA, took many of these specialized policies off the table.

The ACA upended insurance companies as the designers of insurance plans. Instead, the government designed a "one-size-fits-all" plan. It uses a tax called the "individual mandate," which penalizes people for buying any other kind of health insurance not deemed "ACA-compliant." It eliminated the nascent "health status insurance" market by forcing all people to pay, through their premiums, for the coverage of people with costly pre-existing conditions.

The ObamaCare Repeal Will Derail The Republican Agenda Unless Congress Gets Smart. And what are the chances of that?  The AP tells the GOP they must decide what do do with the Health Law taxes. Obamacare, the disaster that keeps on giving.

Obamacare And Affordable Care Act Are The Same, But Americans Still Don't Know That. Well, no one ever got elected by overestimating the information level of the American public.