There is no doubt at this point that Obamacare is on life-support. As Republicans work hard behind the scenes to dismantle it completely, insurer Aetna Inc. announced this week that it will no longer be selling Obamacare plans in Delaware and Nebraska – the last two states in which it was still doing so.
“At this time have completely exited the exchanges,” Aetna said in a statement released May 10.
Though Aetna was initially one of the biggest players in the Obamacare exchanges, this announcement comes as no surprise.
At the end of 2016, Aetna announced that it would cut its participation in the exchanges by 70 percent, reducing the number of states it would sell individual Affordable Care Act plans in from 15 to just four. That decision was made as an effort to claw back some of the company’s losses, and came just two weeks after Aetna declared $200 million in pre-tax losses for the second quarter of that year.
“As a strong supporter of public exchanges as a means to meet the needs of the uninsured, we regret having to make this decision,” Marc Bertolini, Aetna’s CEO, said at the time.
Then, back in February, Bertolini criticized Obamacare’s markets, saying that with the increase in premiums, and more and more healthy individuals dropping out, they were on the brink of failure. In a video interview with the Wall Street Journal he went so far as to say that Obamacare was “in a death spiral.”
Chief Financial Officer Shawn Guertin indicated earlier this month that Aetna might withdraw from the exchanges completely to limit the financial hemorrhage that Obamacare has meant for the company. Even with representation in just four states, Aetna projects it will lose $200 million on individual health plans this year.
The Obamacare Health Insurance Exchange Marketplace officially opened in October of 2013 as an online marketplace for health insurance. The idea was that Americans would be able to obtain affordable healthcare coverage from competing private healthcare providers. Side-by-side comparisons would allow them to make the best possible choices for their families. On-site calculators would also enable people to determine if they qualified for cost assistance subsidies, Medicaid or CHIP. The promise was that tens of millions of Americans would qualify for such subsidies, available only through the marketplace. It was also claimed that 60 percent of Americans would qualify for coverage at $100 or less per month.
So, what went wrong?
Well, Obamacare has been very unpopular pretty much right from the beginning. While it is true that premiums can be as low as just $75 a month, deductibles often run into the thousands of dollars.
Over 8 million Americans were fined an average of $210 per tax return in 2015 for penalties related to Obamacare’s individual mandate.
Some people were also unhappy that they had to pay higher costs if they were cared for by providers that were not in their network, and that certain medications had been placed in high-cost categories by their insurers.
Critics of Obamacare have also called it a “job killer,” since employers are forced to obtain insurance for their staff members, increasing company costs.
Perhaps former President Bill Clinton said it best at a rally in 2016, when he said, “So you’ve got this crazy system where all of a sudden 25 million more people have health care and then the people who are out there busting it, sometimes 60 hours a week, wind up with their premiums doubled and their coverage cut in half. It’s the craziest thing in the world.”
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