Insurers hit the exits, putting another crack in Obamacare

Health Overhaul Undercover Probe

Welcome to the death spiral.

Not to be confused with Sarah Palin’s “death panels,” the death spiral is how health economists describe the vicious cycle that could tear apart our health-insurance market. Obamacare opponents warned that the law was too flawed to avoid the downward spiral. Now it appears we’re in the early stages of it.

Here’s how it goes: If newly insured persons are older and sicker than the general population, they will drive up the expenses their insurer must cover. The insurer will raise premiums to make up for its losses, driving away even more relatively young and healthy consumers.

The losses increase again. Premiums go up again. Lather, rinse, repeat.

Last year’s double-digit premium increases were worrisome, but not enough on their own to send the market into a spiral. Most insurers stayed in the market, so competition was still fairly strong.

That was then. This is now.

Earlier this year, United Healthcare announced it was pulling out of most state exchanges for 2017, including Georgia’s. The bigger blow came this week, when Aetna said it was doing the same.

United Healthcare was a relatively small player in Georgia, but Aetna insured far more of the Georgians who bought health coverage on the state’s Obamacare exchange this year. Tens of thousands of people will need new plans.

Just as bad was the reason the company gave for leaving all but four states’ exchanges. In two and a half years, Aetna racked up $430 million in pretax losses in the individual insurance market.

“Providing affordable, high-quality health care options to consumers is not possible without a balanced risk pool,” CEO Mark Bertolini said in a statement. “Fifty-five percent of our individual on-exchange membership is new in 2016, and… in the second quarter we saw individuals in need of high-cost care represent an even larger share of our on-exchange population. This population dynamic, coupled with the current inadequate risk adjustment mechanism, results in substantial upward pressure on premiums and creates significant sustainability concerns.”

That’s insurer-press-release talk for: Let us off this death spiral, y’all!

Next year, most parts of Georgia will have their fewest individual-insurance options since the exchange opened. One in six Georgians shopping on the exchange this fall will see only one insurer listed, according to my analysis of information provided by the state insurance commissioner’s office. Another one-sixth will have no more than two. Combined, that’s 3.4 million people.

This isn’t about the troubles of rural health providers. Among the cities with only one insurer are Augusta, Albany and Valdosta. Those with just two include Macon, Warner Robins and Gainesville. Outside metro Atlanta, those cities are about as big as it gets in Georgia.

Worse, the insurers remaining in Georgia requested another round of double-digit rate increases for next year — and that was before Aetna announced its withdrawal (state officials are due to rule on those by Tuesday). If Aetna is leaving because its risk pool wasn’t balanced enough, what do you think will happen to other companies’ pools when those folks jump in?

Prices sure won’t be going down. Another turn in the spiral.

Liberals, if they even admit these failures, will point to them as reason for more government “solutions,” such as single-payer. But Washington has shown it won’t make things better by doing more. We need to go the other way.

Reader Comments 0

188 comments
Cobbian
Cobbian

The real problem is the control of the health care market by the insurance industry.


Talk about being able to keep doctors - that has always been a problem because different doctors/hospitals are favored by different insurers.  If your employer changes insurers, you have to change doctors.  And, insurers change who is on their "preferred" lists every year.


Same for your doctor being able to prescribe the medicine (s)he thinks is best for you.  You need the one that is on the insurer's "preferred" list - based on agreements made between pharma companies and insurers.  They, too, are in each other's pockets.


The health insurance market has turned into a nightmare of control of what doctor's a person can see, what hospitals a person can go to, what medicines a person can receive subsidies for.  Insurance itself has become a barrier.  The ACA is pointing out the problems inherent in dependence on a health care market controlled by the insurance industry.


Think about it.  There is no solution in getting rid of the ACA.  We go back to a system that was already broken.  What we need to do is break the control the insurance industry has over the health care market.

Hedley_Lammar
Hedley_Lammar

Aetna left because they werent allowed to merge with Humana


Yawn.


File this one under Death Spiral version 8.


Listen Obama care will require changes down the road. Just like Social Security has etc. Apple didn't create the Iphone and then stop improving it.


But we aren't heading back to a system that left 20 % of Americans uninsured. A shocking stat that we should be ashamed of. The richest nation on earth by far. One that claims to be Christian. Somehow that country cant provide healthcare for all citizens the way EVERY SINGLE OTHER FIRST WORLD COUNTRY DOES


Young people support single payer. The Bernie Bros


We are headed that way wether you guys like it or not.


If Obamacare is replaced it will be by that. Not because we went back to the old way. Which from what I can gather was this


If you are poor. Don't get sick.

Lil_Barry_Bailout
Lil_Barry_Bailout

You implied there would be no health care for the poor without Obamacare.

Lie.

And I'm not sure why you would want everyone to be poor. Seems kind of mean-spirited, but that's today's leftist.

Lil_Barry_Bailout
Lil_Barry_Bailout

@Finn-McCool

Why are people who care about their kids' education looking for alternatives such as charters and private schools and home schooling?

Lil_Barry_Bailout
Lil_Barry_Bailout

Answer my question coward.

You are in denial. Part of the Democrat plantation mentality.

SGTGrit
SGTGrit

Most conservatives don't hate Obama, we just view him based on performance as a narcissistic fool who cares less about America than he does himself. A poor president whose pulled America back not forward.

MarkVV
MarkVV

@SGTGrit I did not know there were so few conservatives that you could find the time to learn how most of them view Obama.

MarkVV
MarkVV

@SGTGrit @MarkVV When you are incapable to respond, you just attack blindly. Typical, and pathetic.

AvgGeorgian
AvgGeorgian

Can someone please post the Republican plan that the republican house and senate are ready to vote on? You know, the one that's better than Obamacare.


Surely in 8 years those Obamacare haters have come up with a detailed plan that is better and cheaper.

SGTGrit
SGTGrit

@AvgGeorgian 

Why should they vote on anything that the emperor will veto? If Trump, wins then they'll present a replacement and vote on it. If Hillary, wins the death of ObamaCare will just follow the course it's already on.

Lil_Barry_Bailout
Lil_Barry_Bailout

There are a couple, and they aren't hard to find unless you're just interested in pretending they don't exist.

Hedley_Lammar
Hedley_Lammar

@AvgGeorgian They haven't come up with a thing.


Its why they haven't had one single vote for an alt plan


Only 60 something votes to repeal Obamacare.

DwightGlover
DwightGlover

@SGTGrit @AvgGeorgian  They managed to vote 50+ times to overturn the ACA knowing that would be vetoed but they couldn't bother to vote on a constructive alternative?

irishmafia1457
irishmafia1457

It's OK Hillary promises FREE healthcare for everyone FREE college, FREE food and FREE housing  .....go go Hillary

13Directors
13Directors

@irishmafia1457 Nope, not free.And free-loaders who don't want to pay for their healthcare might consider Somalia. Taxes are really low there. 

MarkVV
MarkVV

“We cannot afford universal healthcare,” claim the conservatives. (Therefore, the wealthy get whatever healthcare they need, and the others just have to deal with it as well as they can.)

And there is some truth in that “cannot afford.” As long as profits raise the healthcare costs way above what other developed countries pay, and the overwhelming portion of the wealth the country generates goes into the pockets of a tiny minority, the government does not get enough revenue to secure the rights of all.

A solution? Republicans: “Lower the taxes on the rich!”

Infraredguy
Infraredguy

Go to single payer ( Hillary's plan ) Let the rich ( Like her and Bill ) have their private plans ( taxpayer paid ) and private hospitals with a full range of services. Let the general public have the single payer plan, long lines, service rationing and poor delivery of care by doctors who can barely speak English, that's what the UK has and it's been SUCH a success  

AvgGeorgian
AvgGeorgian

@Infraredguy

Read this and let us know if you feel the same.


"While both systems have world class health outcomes, the U.K. health care system has far less variation in health outcomes across its population than does the U.S. In terms offinancial fairness, the UK is also ranked higher than the U.S. This outcome is a direct result of the UK national tax based system versus the private risk-based financing in the U.S. system. In addition, the U.K. system is very low cost when compared both to other developed nations’ systems and to the extremely high cost U.S. system" http://www.healthcareadministration.com/brief-comparison-uk-healthcare-system-vs-u-s-healthcare-system/

RoadScholar
RoadScholar

So where is the repub healthcare plan? Take away others healthcare? Just get it over with and die? Yes HC is expensive, but only the rich should be able to get it?

MarkVV
MarkVV

@RoadScholar The Republicans cannot deliver a sensible HC plan because
a. The HC expenses must be paid, and no amount of money juggling, like HC savings accounts, changes that;
b. Cutting the costs of HC would cut the profits of the supporters of the Republicans.  

RafeHollister
RafeHollister

@RoadScholar Maybe the Gop needs to take the Democrat approach, advocate for passing it, so we can then find out what is in it, like Obamacare.

MarkVV
MarkVV

“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.--That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed,”

What do illness and injury threaten – your Life. And what is instituted to secure that Right? Government.

When Bernie Sanders proclaimed that “Health care must be recognized as a right, not a privilege,” young people all over the country cheered. Do you hear the future knocking on your door?

SGTGrit
SGTGrit

@MarkVV 

Young people won't be doing much cheering when they're faced with supporting themselves or a family, paying taxes with an economy that can no longer fund government operations along with existing entitlements and paying interest on our national debt. Guess what kind of future you'll hear knocking on your door?

Lil_Barry_Bailout
Lil_Barry_Bailout

Have you ever noticed that with leftists "mind your own business" is never an option?

Whether it's your healthcare, what you choose to drive, what size soda you buy, and on and on, they not only think it's their business, but they think they know better than you, and if you don't go along, they'll enlist government to force their beliefs on you.

Scumbags.

RoadScholar
RoadScholar

@Lil_Barry_Bailout Does that apply to the repubs views and desires on women's rights to protect themselves and their bodies also???? The only freedom cons agree with are those that they agree with!

Lil_Barry_Bailout
Lil_Barry_Bailout

Decent people believe that life starts prior to emerging from the birth canal, and so protecting unborn children from murder is as legitimate a government function as protecting anyone's life.

Hope that helps.

RafeHollister
RafeHollister

@Lil_Barry_Bailout We are already hearing rumblings about them coming after your air conditioner.  I read one the other day about how you don't need AC.  Reasoning is, it will not feel as hot outside if you are not cool inside.  Typical liberal lunacy.

Lil_Barry_Bailout
Lil_Barry_Bailout

Just think of all the infrastructure projects we could have if tax payers weren't being forced to pay for Democrats' incidentals (condoms, annual checkups, morning-after pills, Obozophones, etc).

SGTGrit
SGTGrit

As Maggie once said "The problem with socialism is that sooner or later you run out of other peoples money to spend".

RafeHollister
RafeHollister

The trouble with Mark's socialist solutions is there is always the creeping incrementalism.  The proggies don't care about that phenomenon, that want more as well, but we can't afford the programs we have now, and provide defense for the nations that spend all their money on free stuff.  You never hear a proggie mention the national debt, just more taxes, as if we took everything everyone has and gave it to the government, we couldn't afford this largess.  Free has the effect of stimulating incredible demand.  The program would grow faster than we could raise money to pay for it.


If we give everyone free healthcare how do you turn back, when the money runs out.   What do you say to the folks who will demand free abortion care, free tattoo removal, free cosmetic dentistry, free plastic surgery, free weight loss programs, on and on.  Just like Obama said about the free phones, how do you expect people to get jobs if they don't have a phone, turns into how can they get a job with a tattoo on their forehead, or how can they get a job if they have no teeth.  There is never an end to people's "wants".


I will not even get into the five week vacations, guaranteed income, $15/hour minimum wage, rental supplements, guaranteed jobs, etc that are offered by other socialist countries, and will be the next want the crooked politicians will seek to provide..

MarkVV
MarkVV

@RafeHollister Noted that you have not countered any argument I have made, just blown hot air about "socialism."

RafeHollister
RafeHollister

@MarkVV @RafeHollister The only argument you made was a socialist government controlled HC system was better than having folks have some skin in the game and use their individual responsibility and skills to best provide HC for their family.  Collectivism destroys individual responsibility and initiative.  I pointed out a few of the downsides of socialism.  Noticed that you did not counter any argument I made.

MarkVV
MarkVV

@RafeHollister @MarkVV I have not argued for Socialism, therefore I did not counter anything that you euphemistically call "argument." Your ignorance what socialism is and is not is obvious. It is laughable, but also contemptible, when you and others, whenever somebody argues in favor of some social program, merely wail "socialism," "collectivism," as if that answered everything. If they had their way, we would still have child labor, 12 hour working day, no Social Security, no Medicare, no social law and program whatever,  People like that do not belong to a civilized society.

irishmafia1457
irishmafia1457

@RafeHollister no need to prepare or buy school lunches, they are FREE from those who actually pay Federal income tax, why buy school supplies or backpacks, the PC will give every kid FREE backpacks and school supplies. No need for parental responsibility someone else will take care of it!

RafeHollister
RafeHollister

@MarkVV @RafeHollister A Clintonian answer, break out the dictionary instead of arguing the merits.


While in your dictionary look up freedom and liberty.

MarkVV
MarkVV

The comments of those applauding the “death spiral” are both ignorant and sickening.

Let’s take one, a typical one: “Problem is we're out of money,”

Are we? Who is “we?” This richest country in the world is too poor to provide the medical care for her people, while less rich countries can do it?

But you know what those people really mean. As long as they can afford the care they need, who cares about those who cannot! Let them suffer, let them die! They just do not want to say it openly, so they talk about running out of money, “moochers,” subsidies. And moan about premiums.

They talk as if they had a better solution than ACA, which they do not have. They talk about rising insurance rates, as if they did not rise before ACA. The do not mention those, who before ACA were getting bankrupt because of the lack of insurance, were denied insurance, getting insurance cancelled because of sickness.

Their favorite recipe is “to let insurance companies compete across the state lines,” and attacking provisions that do not apply to them As if that could solve anything. Competition of the insurance companies does nothing to lower the cost of the medical treatments, which drive the premiums. The provisions providing insurance for conditions not applicable do not increase the premiums.

But anything that would actually lower the costs, such as letting Medicare negotiate the prices of drugs, that is out of the question – it would lower the profits in the private sector, and that is a no-no.

Ignorant and sickening.

gapeach101
gapeach101

@MarkVV

" let insurance companies compete across the state lines,”

Georgia now allows that and you know how many insurance companies have done that?   ZERO

Lil_Barry_Bailout
Lil_Barry_Bailout

How much did you donate last year to help those who still don't have health insurance?

Zip?

Sickening and hypocritical.