Tuesday, February 4, 2014

Was it a bug or a feature?


We’ve often railed about the completely illiberal notion of forcing people, under the threat of a rectal exam by the IRS, to part with their hard-earned scratch to line the pockets of for-profit entities, in ObamaCare’s case, the health insurance industry.

We may not be railing for too much longer if the following case of AETNA becomes a larger trend and Big Health simply drops out of ObamaCare.

Hello, single payer!

From CNBC:

Aetna CEO Mark Bertolini told CNBC on Wednesday that Obamacare has failed to attract the uninsured, and he offered a scenario in which the insurance company could be forced to pull out of program.

He said that so far, Obamacare has just shifted people who were insured in the individual market to the public exchanges where they could get a better deal on a subsidy for coverage. "We see only 11 percent of the population is actually people that were firmly uninsured that are now insured. So [it] didn't really eat into the uninsured population."

Add to that it’s not the right type of uninsured. Indications are that there are simply not enough young healthy people signing up, the so-called young invincibles, who won’t be a drag on the healthcare system but whose money is needed to offset the cost of the old and sick. This is the adverse selection we have been talking about for years now.

So what’s going to happen? Back to the article:

The company will be submitting Obamacare rates for 2015 on May 15.

"Are they going to be double-digit [increases] or are we going to get beat up because they're double-digit or are we just going to have to pull out of the program?" Bertolini asked in a "Squawk Box" interview from the World Economic Forum in Davos, Switzerland. "Those questions can't be answered until we see the population we have today. And we really don't have a good view on that."

Let us help out with that answer: Yes.

We simply cannot wait until that May date and the shrieks of protestation and threatening language that will emanate from the White House and from the offices of Health and Human Services, and, in particular, the HMFIC of HHS, Kathleen Sebelius. This will be fun.

More from AETNA’s honcho:

For Obamacare to work better, it needs more flexibility and choice of insurance programs, Bertolini said. "We need to make it a lot more simpler for people. There needs to be more choice. When you get more choice, you make it more of a market and you get more people in the program."

You know, if only some people were around to warn that top-down, centralized planning would actually restrict choice and flexibility. Yes, Bertolini is certainly correct: getting the government out of the equation will greatly improve the situation but that horse is out of the barn with scant chance of corralling and returning it to its original locale. We will forthwith refrain from the use of any other tortured analogies.

Years from now, when we look back at how it is we got to a single-payer system, we will ponder this: was it all part of the grand plan to design a federal healthcare system that after a few years or even a decade or two, simply imploded unable to hold up under its own weight or was it simply due to monumental incompetence and hubris thinking that the strings of 1/6th of the nation’s economy could effectively be pulled by the smartest kids in the room?

Programming note: we will be out of pocket for a few days but hope to be back up and running by Thursday or Friday.

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