Diary

Dramatic Obamacare Breakup Enters Ugly, Expensive Phase

By Michael T. Hamilton

I’ve witnessed some bad breakups among my Millennial peers, but the Obamacare breakup beats them all. You can fight. You can bite. You can DTR—that’s “define the relationship,” Dad—but sooner or later, lovers’ quarrels that can’t be resolved must come to an end. Once that determination is made, a clean break is best.

Ask your sister. Ask your friend’s sister (unless it is she you’re breaking up with). Ask anyone in your circles who would prefer not to hear your drama for the next six to 18 months about your emotionally driven choice to dive headlong into an insurance system—er, I mean romantic relationship—doomed to fail.

“Would you rather get one shot in the head or five in the chest and bleed to death?” A sound rhetorical question from Brad Pitt’s Moneyball (2011) character Billy Beane, training economist-turned-baseball scout Peter Brand (played by Jonah Hill) how to break the news to a professional ball player that he has been traded.

The same question could be asked of every American patient, doctor, insurer, elected official, and appointed bureaucrat pining for the brave new world of health care promised by the Patient Protection and Affordable Care Act (ACA), sealed with the kiss of death by President Barack Obama in 2010.

Unfortunately, starry-eyed ACA proponents insist on a bloody five in the chest, simultaneously prolonging and accelerating the inevitable Obamacare death spiral millions of Americans predicted.

The latest blow was an August 15 announcement by mega health insurer Aetna that it would cease in 2017 from offering individual insurance plans in more than two-thirds of the 778 counties where the company currently participates in the Obamacare exchanges.

Aetna’s announcement followed competitor United Healthcare’s decision in April to exit by 2017 all but eight of the 34 state Obamacare exchanges in which it is active. Holding company UnitedHealth Group further cut this participation figure down to just three of 34 states.

To put these announcements in perspective: These are two of America’s largest health insurers, who arguably stood more to gain than any other party from ACA’s individual mandate, which coerces Americans to purchase health insurance by threatening them with a tax penalty.

This is the appropriate moment to picture Aetna and United Healthcare flooring their Volvos down Pennsylvania Avenue to toss the mink coat and gaudy ring Obama gave them halfway up the White House driveway. It’s ugly, costly, and can burn everyone around them. Yet, when mom and dad fight, the kids suffer most.

It is patients, not health insurers or Obama, who suffer a low blow each time ACA proves unstable and unsustainable. Participating insurers have practically developed a routine of hiking patient premiums by double-digit percentages each year just to keep up with the cost of insuring disproportionately unhealthy pools of individuals. Insurers pass these costs on to patients, whose Obamacare plan premiums and deductibles have risen so high, many are cashing out of the insurance racket altogether, penalties be damned.

Ever shifting blame, some ACA proponents fault insurers instead of federal mandates for these perennial premium hikes. David Niklaus, business columnist at the St. Louis Post-Dispatch, criticized UnitedHealth Group in 2015 for having underestimated the costs of insuring innumerable unhealthy individuals. Meanwhile, unpredictably tardy husbands blame their wives when dinner, cooling on the table since six o’clock, is stone cold.

Not that insurers do not play a huge role in escalating the cost of health care; they do. But blaming insurers for failing to predict the future better than ACA’s central planners in Washington, DC, while worshiping the flawed central plan, makes little sense.

Los Angeles Times columnist Michael Hiltzik was essentially right to call “insurers’ withdrawals from ACA exchanges … a sign that the fundamental error in the ACA’s design was giving too much away to the insurance industry,” in an article published the same day Aetna broke up with Obamacare.

More precisely, ACA’s real flaw is trying to reform health care by empowering insurers and federal bureaucrats to make health care choices for patients and providers.

Hiltzik says the government should start “threatening to take some of that” power back.  Escalating threats and mandates, however, is a foul substitute for health care reform—not to mention partnerships among free persons. Threats and mandates portend dysfunction.

ACA continues to fail as the relationship to govern all health care relationships. It’s time for a clean break.

Michael T. Hamilton ([email protected]) is The Heartland Institute’s research fellow for health care policy, author of the weekly Consumer Power Report, and managing editor of Health Care News, an online and print newspaper read by market-minded health care professionals, policy analysts, and 56 percent of lawmakers.