Aetna leaves last two Obamacare exchanges


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Finding out what’s in it: Aetna has pulled out of its last two Obamacare exchanges, in Delaware and Nebraska.

Aetna projected more than $200 million in losses from its exchange plan businesses this year following a loss of $700 million for 2014 through 2016. The insurer attributed the losses to “marketplace structural issues, that have led to co-op failures and carrier exits, and subsequent risk pool deterioration.” Aetna said it had 964,000 individual commercial plan members as of the end of 2016, but that number dropped to 255,000 at the end of March.

Essentially, Obamacare is destroying the health insurance industry, because no insurance company can afford to offer insurance when anyone can simply wait until they are sick — “a pre-existing condition” in the politically stupid parlance of the time — before buying insurance. This also means that the Republican plan, in whatever form it will be take when it finally reaches Trump’s desk, will do nothing to save the industry either, since it appears that the Republicans are terrified of being called mean and will thus keep the requirement that insurance companies sell insurance to anyone, whether they are sick or not.

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11 comments

  • Early Bird

    Aetna projected more than $200 million in losses from its exchange plan businesses this year following a loss of $700 million for 2014 through 2016.

    Have these figures been furnished by a reputable, third-party accounting firm? Or by Aetna itself?

    (Insurance industry accounting is at least as dishonest as Hollywood accounting, which is why I ask.)

    I hope Aetna, et al. are not expecting some sort of government bailout after these “losses” (real or imagined). If I sound unsympathetic, it’s because my understanding is that they co-wrote Obamacare.
    I am also led to understand that, when all is said and done, O-care is the healthcare equivalent of a Ponzi scheme where young, healthy people with little need for health insurance are coerced into buying it anyway so they subsidise older people. Is my understanding flawed?

    True capitalism is, above all else, about risk. I feel little sympathy for folks who seem to think they are entitled to profits no matter what happens. Assuming, for the moment, that those figures are correct, it appears Aetna gambled and lost: welcome to capitalism.

  • wayne

    Early Bird–
    good stuff.
    (there’s something like 17 different methods to calculate Net profits on a Movie.)

    It’s my understanding, these are losses are exclusively in their respective “exchange plan” segments. These are customers who buy insurance that is directly subsidized.

    Aetna continues to make money in their regular employer sponsored group plans. (they have something like 30 million customers nationwide.)

    Bail-outs were already part of the plan, but I’m fuzzy on when & under what circumstance they kick in, to whom, or how much. [the whole “risk-corridor” payment scheme] And a lot of that stuff was front-loaded in Obamacare, while the more onerous & expensive provisions didn’t actually fully kick in until 2017, by design. Now everything is starting to jell, the costs are astronomic, and the subsequent distortions are expanding at an increasing rate.

    By and large, the health-insurance industry completely sold out to the idea of having customers who are forced to buy their products and in the process became a complete crony appendage of the State where they all but completely privatize profits, and Mitch, Ryan, and Priebus are going to help them socialize all their losses.

    They willing got into bed with the Feds, no doubt about it.

  • Early Bird


    By and large, the health-insurance industry completely sold out to the idea of having customers who are forced to buy their products and in the process became a complete crony appendage of the State where they all but completely privatize profits, and Mitch, Ryan, and Priebus are going to help them socialize all their losses.

    That was my understanding as well: that Obamacare is simply another crony capitalist scheme where the American government decides who wins and who loses.

    Nor do I doubt for a moment that bailouts were written into this scheme from Day One. It simply infuriates me that the American taxpayers are left holding the bag like this. Again.

    If my Classics are not altogether rusty, I seem to recall that departing officeholders in ancient Athens were subjected to a process known as “euthunai” (audit). Half of the process was the presentation of the ex-officeholder’s accounts (“logoi”) so that they could be scrutinised by boards of “logistai” (accountants). The other half was the scrutinisation of the ex-officeholder’s conduct, and anyone could bring charges that, if found to have substance, would see the ex-officeholder given over to a court for trial.

    (I also seem to recall that the penalties for misconduct included execution.)

    Of course, just as you say, the “more onerous & expensive provisions” aren’t being implemented until now, long after the officeholder responsible has left office. Still, the Americans might want to seriously consider implementing their own version of the “euthunai” before their country is irretrievably driven into bankruptcy.

  • pzatchok

    Think about this one.

    300 million people in the US had insurance in one form or another.

    The destitute had public medicaid.
    Children were covered by a public form of CHIP(Ohio’s plan).
    The retired were covered by semi-public Medicare.
    All visiting foreigners were covered by their own insurance or international reciprocity rules and agreements.
    All the rest were covered by company or private paid insurance of their choice.

    The last 20 to30 million people were what this WHOLE Obama Care fight was all for.

    Of those a large majority were young people who chose not to be covered and took the risk. They thought forcing this small group to sign up would lower the cost for everyone. Idiots.

    If they didn’t like how Medicaid was covering people change Medicaid. They could have changed how they calculated those eligible. Instead of going off of your assets and income just calculate off of the patients income. Thus those with pre-existing conditions who are dropped by their private insurance can be covered by Medicaid.

    Instead of giving subsidies to private insurers, just put those people who were going to get them on Medicaid.
    Again, just improve the public health care system we already had in place.

  • Steve Earle

    pzatchok, well said. There was no reason it couldn’t have been done that way.

    Except one.

    That way wouldn’t have fulfilled the Dream. The Dream that was (and IS) fully Socialized Medicine.

    The Left wants EVERYONE to be on Government Controlled Healthcare (controlled by them of course)

    And the Insurance Companies went along since it would guarantee PROFITS (at least at first).

    This is not unlike the Illegal Alien issue where there is an unholy alliance between the Left, who want voters that are dependent on them, and Crony Capitalist Businesses, who want slave labor to guarantee their PROFITS.

    Meanwhile, in both cases, those of us in the Middle pay the price, literally and figuratively…..

  • wayne

    Early Bird-
    I’d be happy with term-limits, no pensions of any sort for political office-holders, and they should be required (in D.C. itself) to receive medical care from the same hospitals/clinics as the lowliest Medicaid recipient.

    pzatchok/Steve Earle–
    Most Excellent Points.
    Single-Payer is the Endgame, Obama set the stage, and Trump is going to complete the Play with his new best-friends Priebus, Mitch, and Ryan.
    This entire mess concerns giving free medical care, to an extremely small number of people, and making the rest of us pay for it at the point of a gun.

    But, it’s never really been about medical-care, it’s all about wealth redistribution, using medical care.

    And, I’d be remiss if I didn’t point out, crony-capitalism IS socialism/communism. Favored groups and industry parasite off unfavored groups and industry, at the behest and command of the Federal government.

    These are not market-failures or failures of capitalism.
    Crony insurance companies couldn’t wait to have their customers forced to consume their products with the IRS enforcing the rules. (Heard recently, something to the effect that “American’s without insurance coverage paid almost $2 billion in tax-penalties to the IRS in 2016,” but don’t quote me on that factoid.) Whatever that amount actually is– it all went into the General Fund and is not segregated to backstop anything. They just Spend More.

    tangentially– 1/2 of what I do every day, is billed to Medicaid. (The other 1/2 is billed to “private insurance,” –whatever that is, these days.)

    Contrary to popular belief, Medicaid actually pays very well, but they do not pay very long.
    –Medicaid is administered by private insurance companies under contract with the States. Most, but not all of them, make money off Medicaid by virtue of how the contracts are written. (Think of NASA buying hardware from the Usual Suspects.)
    Meanwhile Medicaid spending is consuming almost 25% of individual State budgets.

    It is my belief that our so called Leaders, are totally incapable of controlling & restraining themselves, and that is why I support a Convention of States.

    Convention of States:
    The Plan to Restore America
    https://youtu.be/gRpnV0Y7w-M
    (2:56)

  • Steve Earle

    wayne said:

    “…But, it’s never really been about medical-care, it’s all about wealth redistribution, using medical care.

    And, I’d be remiss if I didn’t point out, crony-capitalism IS socialism/communism. Favored groups and industry parasite off unfavored groups and industry, at the behest and command of the Federal government….”

    ********************************************************************************
    Excellent add-on points Wayne, esp those two.

    IDK about 2 billion in “Tax” penalties, but I do know that my State of Massachusetts spent over 2 billion on Medical Services and Welfare Payments (mostly EBT cards) for Illegal Aliens last year.

    That’s 2 BILLION with a B in one year on JUST the Illegal Aliens, who aren’t legally supposed to be getting ANY benefits.

    That’s what they admit to…. You can just imagine the waste and fraud going on with the rest of the spending.

    But as you said, it’s all about wealth redistribution from the Middle Class to the Upper and Lower Classes, all in the name of “Social Justice”, but really is in the name of furthering the slide into Socialism/Communism.

    And nothing is said by the Boston Globe or the rest of the Leftist media.

    It’s good to be a politician in the one-party controlled People’s Republic……

  • Vladislaw

    Funny when you look at their stock chart …

    However, stripping out the costs associated with the termination of the Humana merger agreement, Aetna earned $2.71 a share. That compares with adjusted earnings of $2.32 a share last year and beat analyst forecasts of $2.37 a share. Revenue came in at $15.17 billion, down from $15.69 billion last year.
    ‎Financials · ‎News · ‎Profile · ‎Analyst Estimates

    http://www.marketwatch.com/investing/stock/aet

  • wayne

    Vladislaw-
    Thanks for filling in the picture on Aetna. (And I had forgotten about their merger with Humana.)
    Top 3-4 health insurance companies, if I recall correctly, insure over 150 million people. They do make money on their non-“exchange” policies.

  • pzatchok

    I have a short question.

    Now that everyone has unlimited healthcare when is my car and home owners insurance going to come down to reflect the fact they no longer have to pay for medical costs?

  • Steve Earle

    pzatchok said:

    “..Now that everyone has unlimited healthcare when is my car and home owners insurance going to come down to reflect the fact they no longer have to pay for medical costs?…”

    THAT is an an excellent question….. one that I think we all know the answer to…..

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