Aetna Deals Blow To Obamacare Showing Sanders Was Right On Need For Single Payer Plan

Aetna

Aetna has announced that they are going to greatly scale back the number of markets in which they will participate in on the exchanges under the Affordable Care Act. This is very bad news for Obamacare. Last year it was looking like insurance companies were doing well and wanted to increase participation. The big question is what happened.

One possibility is that Aetna is telling the truth that the plans were not profitable as sicker people than they anticipated were joining, leading to greater costs.

Another possibility is that Aetna is doing this to retaliate against the Obama administration for fighting their desire to merge with Humana.

Consumers are screwed either way. Having less competition in the exchanges due to fewer companies offering plans will likely lead to higher premiums. On the other hand. allowing further consolidation of the insurance industry will also lead to less competition and higher costs.

During the fight over the Affordable Care Act there were proposals for a public option modeled on Medicare or for an option for older individuals (who are probably the most responsible for the higher costs Aetna complains about) to buy into Medicare. Both were blocked because the two most conservative Senators voting with the Democrats, Joe Lieberman and Ben Nelson, opposed these plans. With no Republicans voting for Obamacare, they could effectively block either idea. It is unknown if things would have been any different if the White House had pushed more forcibly for these plans.

Of course Bernie Sanders had the right idea in taking these concerns over profit out of the equation in proposing Medicare for All, which Hillary Clinton opposed during the campaign. It is also unknown if Sanders could have brought enough liberal Democrats into Congress with him over the next few elections if he was the nominee. It is probably a safe bet that a DLC based Democratic Party under Hillary Clinton will not move the country to the left in such a manner.

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19 Comments

  1. 1
    Philo Vaihinger says:

    No, it just means the subsidies are not enough to defray costs when too few healthy people sign on.

    Totally socialized insurance will probably work out as well as collectivized agriculture in Cambodia under the Khmer Rouge.

  2. 2
    Ron Chusid says:

    Medicare for All is not “totally socialized” health care and it has nothing to do with collective agriculture or the Khmer Rouge. Medicare for All maintains private providers of health care. It just eliminates the problem of insurance companies profiting from the system while not providing value. This is the type of system seen in much of the world–yet conservatives like you cling to such red baiting like bringing up the Khmer Rouge.

  3. 3
    Mike Hatcher says:

    "…allowing further consolidation of the insurance industry will also lead to less competition and higher costs." I read that line and wondered who hacked your account and wrote that? Does not heavier regulations, in any industry, lead to less competition, and thus higher costs? Did you know that Michigan is running radio ads in Texas (I'm assuming Michigan runs them in other states as well) that brag about how Michigan is a great place for business since they have removed 2,000 unnecessary regulations in the past five years. Ok, 2,000 unnecessary regs down, how many to go?  8,000 more? So many rules generated by so many entities, we probably are all breaking 3 or more laws a day without even knowing it.

  4. 4
    Ron Chusid says:

    Less companies offering insurance means less competition.

    The effects of regulations depends on the specific regulations. While bad regulations will cause problems, and there is no doubt there are still some bad regulations on the books, markets will not work without adequate regulations.

  5. 5
    Mike Hatcher says:

    Of course you are right about the specificity of any given regulation. But I would argue that the volume of regulations makes a difference as well. If you wanted to play a game but found out the rules to the game were as long as a set of encyclopedias, you might get discouraged from even attempting to play. Many of your friends fuss about Wall Street and the Banks, (and there is a lot of valid criticism about those institutions) but why don't the complainers start their own stock exchanges or banks.  It is possible to do, and to some extent, people do it.  But good luck getting through the mountains of rules, rules that if not followed correctly, would not just make one broke but could land someone in jail.  – two other subjects – I'll admit I did not watch Dinesh D'Souza movie, I find his life story compelling, I truly believe he was maliciously prosecuted, that being said, that doesn't make his movie any good. From what I read, Andrew Jackson was a slaver holder and a Democrat-therefore all Democrats today are bad.  Not worth watching to find out if this is a mischaracterization  or not. You would probably get more out of current political attack commercials.  _Third, final issue: I'm interested in your take on Obama/payment/hostage thing.  I know Iran doesn't have banking relations, thus cash in an airplane, the method doesn't alarm or bother me, what bothers me is having even negotiated with the Iran regime at all prior to release of hostages. Step one: release hostages, Step two: start talking deals.  But I would appreciate a counter perspective.

  6. 6
    Ron Chusid says:

    The problem with Wall Street isn’t the sort of thing which can be reformed by starting your own exchange. The biggest problems are with corporate control over government, not the exchanges. Exchanges need to be tightly regulated to keep investing as honest as possible. The less the process is trusted, the less investors will risk their money.

    I haven’t seen the Dinesh D’Souza movie. What I’ve read about it hasn’t been favorable, but I can’t comment myself.

    The whole Iranian deal is rather gray with multiple items being involved. It wasn’t clearly a ransom payment as it was the return of money negotiated over a separate matter (the previous payment for arms which were never delivered) but it sure sounds like it comes close to one in how everything got intertwined.

  7. 7
    Mike Hatcher says:

    I solemnly affirm I did not see this news story prior to our two last comments. And while it doesn't weaken your argument about the problem with Wall Street, it does support my  contention that rather than trying to force government to fix everything we don't like about what someone else is doing, we can take action ourselves, such as starting our own stock exchange.  http://money.cnn.com/2016/08/19/investing/iex-wins-sec-approval-goes-public/index.html?iid=hp-toplead-dom

    albeit, a painful process no doubt, given all the rules and red tape.

     

  8. 8
    Ron Chusid says:

    I fully support such entrepreneurial efforts, but this really has nothing to do with the major problems with Wall Street.

    Without all the regulations to try to keep the markets honest, this type of business effort wouldn’t have a shot of getting off the ground. Regulations on financial markets are necessary for anyone to have trust in them and put their money there. Without regulations we have no markets and no modern economy.

  9. 9
    KP says:

    As somebody who vigorously exchanged ideas with you going back to 2009 about Obamacare, I will take this one opportunity to say "I told you so".

    First I said it was a poorly written bill. Then I said it was poorly written law. Then I explained why it would not last.

    The idea was noble but it was never going to succeed given the working parts and the political environment.

    No pleasure here in reminding you what was clear to those of us who are not ideologues.

     

     

  10. 10
    Ron Chusid says:

    I never said it was perfect, but it was a big improvement over what we had before. This doesn’t mean it won’t ultimately succeed and that it won’t be improved upon–but you are right that the political environment works against it. The law has still succeeded in increasing the number of people covered, and in giving us insurance coverage which the insurance companies cannot terminate on an individual basis because of health conditions. They obviously can get away with eliminating coverage by withdrawing from markets. It remains to be seen as to whether there will be many markets with nobody selling coverage.

    I believe we have always agreed that single payer would have been preferable (if it could have passed).

  11. 11
    Brent says:

    "clear to those of us who are not ideologues."  –Kevin P.

    Kevin, you look like the ideologue here. Supporters of the Affordable Care Act certainly were not. The ACA was a pragmatic law written to solve problems, with a hell of a lot of compromise based upon the political situation. Backers of the law were not ideologues by the very definition of ideologues.

  12. 12
    Ron Chusid says:

    True, but that’s Kevin. Best not to argue the point. We have gone through this a lot and in the end our views probably weren’t anywhere as far apart as it might have appeared when we argued over the law, especially now that it is a done deal.

  13. 13
    KP says:

    Like I said Brent, it was a noble idea put in place by impractical idealist and/or blindly partisan advocates (definition if ideologue).

    Yes, Ron, we agree, single payer is the way to go.

  14. 14
    KP says:

    I agree, Ron, we weren't that far apart.

    Our main differences as I remember:

    You said the law would work. I pointed out why it would not (recall, not because I didn't want it to).

    You said cost would be reduced. I said cost would not be reduced. My cost has gone up 45% each of the last two years (nearly tripled). I expect more sharp increases in November.

    You said there would be no change in the level of care for those of us already well insured. I said there would be waiting lists and a drop in level of care. There is a three month wait to see a specialist in SoCal Kaiser. The physicians who work there and are patients of mine tell me the level of care has dropped as they added thousands of patients and little if any physicians. But I knew that as I have been a patient there for over 15 years.

    But as you say, best not to argue the point, especially on your blog, so I won't 🙂

  15. 15
    KP says:

    We agreed that people need insurance and no one should be turned away with a pre-existing condition. Those are two big issues!

  16. 16
    Ron Chusid says:

    Kevin,

    1) The law is working. Not perfectly (and I never said it would work perfectly) but it is working. It would work better if adjustments could be made, which is normally done after any major law, but Republicans are blocking that. There are many more people who are insured, and nobody who is being denied coverage or losing their coverage due to health reasons.
    2) No, I said that most of the aspects to reduce costs didn’t make it into the final law, reducing the possibility of cutting costs. It has cut costs in some areas, but it has had a very limited effect here. You have a group plan, not an exchange plan, and the rate increases are independent of the ACA. Costs in may private plans were rising at comparable rates prior to the ACA.
    3) Again, you are in a private plan, attributing problems to the ACA which are from multiple factors.

  17. 17
    KP says:

    Thanks for the feedback. Back to today's programming 🙂

  18. 18
    Ron Chusid says:

    One thing I thought of adding but got tied up at the hospital and couldn't finish. Regarding # 3, while it is theoretically possible that your particular plan was impacted more than others, but the numbers nation wide are pretty clear that the added coverage through the ACA did not result in significant increases in utilization which would impact care in most cases. The major exception was some clinics which primarily have Medicaid populations, and wound up with more patients due to the expanded Medicaid program. Even many Medicaid practices wound up doing better under the ACA as they were previously treating people for free and now at least receive Medicaid payments. Plus there was the initial uplift with Medicaid paying more for primary care services for the first two years.

  19. 19
    Brent says:

    "it was a noble idea put in place by impractical idealist and/or blindly partisan advocates (definition if ideologue)." –Kevin

    Partisan is not the definition of ideologue. Partisans may or may not be ideologues. Right wing Republicans are ideologues and partisans. Clinton supporters are blindly partisan but not really ideologues–they hold no real principles.

    Even if we go by Kevin's definition, support for the Affordable Care Act was both non-partisan and non-ideological. It was a pragmatic, non-partisan effort to get thru something which could pass and was an attempt, even if unsuccessful, to bridge partisan divides. The ACA was largely based upon the Heritage Foundation's plan–a Republican plan. It is similar to Mitt Romney's plan in Massachusetts–a Republican plan. An ideologue would have insisted on single payer or nothing. A partisan would not have proposed a plan with such Republican roots.

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