18 August 2016

Obamacare Without Life Support

Obamacare, or the Patient Protection and Affordable Care Act is collapsing under its own weight.

This week Aetna, one of the nation's largest insurers, announced that they are pulling out of health exchanges in 11 of 15 states. They join United Health Care and several other insurers in reducing their exposure to the Affordable Care Act.

Although this is startling news, CNN relegated it to their subsidiary broadcast station and website CNN Money. You can read the details there. The only coverage CNN website provided was an editorial arguing how the ACA can still work without Aetna.

Meanwhile, CNBC filed this report.

Of course, this comes as a surprise to no one except Progressives. The cost of other social welfare programs such as Social Security and Medicare have far exceeded projections. When the government introduced Medicare it projected that costs would reach $12 billion by 1990. The actual figures turned out to be $98 billion. Currently, Medicare expenses exceed $500 million. This poses no problem for the government. It simply raises taxes or borrows more money.

The ACA partnership between the government and private insurers does not work that way. Private insurers cannot force taxpayers to subsidize the program. The government anticipated the possibility that the ACA might create financial challenges for some insurers. It created a risk corridor program to use "excess" profits from some companies to subsidize the losses of others. In the government's view, there are always "excess" profits. Unfortunately for the government, this time there were none.

One of the convenient things about this partnership is that when it fails, the government always can blame "greedy" insurance companies.

Unfortunately for the government, that will not save the ACA.

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