What Aetna’s Decision to Leave the Obamacare Exchange Says about the Future of For-Profit Health Care | Soapboxer | Indy Week
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What Aetna’s Decision to Leave the Obamacare Exchange Says about the Future of For-Profit Health Care 

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This wasn't a banner week for the Affordable Care Act.

Last Tuesday, Aetna abruptly announced that it was pulling out of eleven of the fifteen Obamacare exchanges in which it did business; North Carolina's was among them. This followed similar decisions by UnitedHealth Group and Humana, which reported nine-figure annual losses on the exchanges. Aetna had its own motives: its about-face came a month after the Obama administration blocked a proposed merger with Humana.

But the results are the same regardless: some 838,000 people, including 94,000 in North Carolina, will have to find new policies. Add to that the fact that insurers remaining in the exchanges will seek—and likely receive—double-digit rate hikes next year, and the Obama administration's signature law appears wobbly.

Conservatives pounced. "As Obamacare continues to collapse," Senator Richard Burr posted on Facebook, "more and more families will be left without health insurance."

Is Burr right that Obamacare is collapsing? As these things tend to be, it's complicated.

At the simplest level, the big insurers' losses owe to a lopsided risk pool: not enough young, healthy people are signing up, so the exchange's populations tend to be older, sicker, and more expensive to cover. In fact, not enough people are signing up—the nearly thirteen million on the exchanges in 2016 are well below what the Obama administration predicted.

On the other hand, last year, the rate of uninsured Americans fell to 9 percent, the lowest it's ever been. And the ACA made it a fundamental tenet of American policy that you can't be denied coverage for preexisting conditions. Those are good things, and they would evaporate the second Republican "repeal and replace" fantasies came true. Besides, it's not like the pre-Obama insurance world was a barrel of plums.

But we shouldn't pretend that nothing's amiss. In North Carolina, insurance commissioner Wayne Goodwin, a Democrat, is certainly concerned. There's only one statewide insurer left on the exchange—Blue Cross Blue Shield of North Carolina—and Goodwin fears that it may not be able to absorb 250,000 former Aetna and UHC clients.

The ACA's struggles in North Carolina aren't just the product of a design flaw. They're also a result of Republican sabotage. For instance, when the legislature decided to abandon a state-run exchange, defaulting to the feds, that stripped Goodwin of the flexibility that insurers want. If there were a state exchange, he says, "there would be two more carriers."

Another issue: the state's refusal to expand Medicaid, which would cover a half-million people, many of whom aren't all that healthy and don't have insurance. That drives up costs. According to one recent analysis, insurers in states that haven't expanded Medicaid are asking for significantly higher rate hikes this year than insurers in states that have.

After November, Goodwin says, "there needs to be a deep-dive policy discussion ... . I do believe there's the opportunity for Washington and state capitals to re-engage and work on meaningful compromise."

Perhaps. But given GOP control of the House, it's hard to see what "meaningful compromise" would look like. Democrats, including Hillary Clinton, are once again calling for a public option, which makes sense. After all, had the Obama administration included a public option in the ACA, rather than appeasing insurers, it wouldn't really matter that Aetna dropped out.

But I think this episode raises a more fundamental question: Can universal health care and for-profit health care coexist? Or are the interests of one diametrically and eternally opposed to those of the other? If they are, then we'll have to make a choice: Do we want everyone to have health care, or do we want insurance companies to fatten their bottom lines?

Despite the ACA's best efforts, it sure looks like we can't do both.

This article appeared in print with the headline "Profit Statements"

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