We were warned Obamacare exchanges would see less competition and choice in 2018—and over the past 24 hours, two insurers have turned that fear into a reality.
But that’s not all. Just this morning, Aetna’s CEO declared that Obamacare markets are in a “death spiral,” predicting even more insurers will leave in the coming weeks. With shrinking competition in individual markets, incentives for Americans to sign up for coverage are dwindling. Now, incentives for insurers to stick around are fading, too.
The Humana news follows the decisions last year by insurance giants United and Aetna to leave the Obamacare markets. Here was Speaker Ryan’s reaction to Humana’s decision during his interview on Morning Joe:
“Assuming that the status quo can stay with Obamacare is wrong—it’s collapsing as we speak. Humana, I think, just announced yesterday they are pulling out. So we’ve seen United pull out, we’ve seen Aetna pull out, we’ve seen Humana pull out. The Blue Crosses are on their last breath in these plans. So the status quo isn’t staying put—it is collapsing. So that’s one of the reasons why we’re doing Obamacare first because we’ve got to rescue people from this collapse. And we feel an obligation to do that.”
WHY THIS HAPPENED
Humana cited two main reasons for its decision: One, “the market has not stabilized enough to participate next year,” and two, the company “is losing money from taking on too many sick people without enough healthy people to balance the pools.”
In other words: Obamacare markets are not sustainable. Aetna’s CEO admitted “it’s getting worse.” As designed, the system relies on young, healthy Americans to keep it afloat. Unfortunately, people just aren’t buying it, making health care across America less affordable. Last October, POLITICO delved into “Obamacare’s millennial problem”:
“The 18- to 34-year-olds who helped elect Barack Obama could consign his signature domestic policy achievement to failure. That’s because not enough millennials have signed up for Obamacare to make it work well. Despite repeated outreach—including entreaties from all manner of celebrities, including NBA stars and Obama himself —young people make up less than 30 percent of Obamacare customers. The White House had set a goal of 40 percent in that age bracket to sustain a healthy marketplace…”
Unfortunately, we saw this coming—it’s more bad news for the country as a result of the collapsing health care law. As Speaker Ryan said Tuesday, “Insurers should compete for your business, and treat you fairly.” But as evidenced by the latest development, under the current system, they aren’t able to.
That’s why Republicans are pursuing solutions that will increase competition, lower costs, and put the patient back in control. Using ideas introduced last summer, we are working to repeal Obamacare and replace it step-by-step. We believe in a system that encourages choice and prioritizes the patient, not Washington’s mandates. It’s time to restore the competition that gives Americans the control and flexibility over their health care that they deserve.