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Major Insurance Company Will Leave Ohio’s Insurance Exchange

Major Insurance Company Will Leave Ohio’s Insurance Exchange

Obamacare claims another victim.

Anthem Inc, a prominent national health insurance company, has decided to leave Ohio’s health insurance exchange citing a volatile market.

It’s another example of Obamacare’s collapse, especially since Anthem became “a major player in the individual insurance market created by the federal health care law.” From The New York Times:

Ohio state insurance officials said they were reviewing their options but put the blame squarely on the federal health care law. “For the past few years we have seen a weakening in the federal insurance marketplace as a number of companies have withdrawn from the exchange,” the state agency said in a statement. “We have always argued the private insurance market is the most severely impacted by the federal law and that is where Congressional action is needed to restore stability.”

Anthem has not made a decision to pull out of other states yet. But without Anthem, at least 18 counties in Ohio will not have “available ACA marketplace plans.” The Wall Street Journal reported:

In announcing the decision, Anthem said that setting prices and making decisions about ACA plans has become “increasingly difficult due to the shrinking individual market as well as continual changes in federal operations, rules and guidance.” The insurer said the market remains “volatile,” and it cited the uncertainty surrounding key issues including federal payments that help reduce costs for low-income ACA enrollees.

The insurer said an “increasing lack of overall predictability simply does not provide a sustainable path forward to provide affordable plan choices for consumers.”

The company “has filed 2018 ACA plans” in Virginia, Maine, and Connecticut. It can still cancel those plans, though.

Other Recent Pullouts

Last month, Blue Cross and Blue Shield of Kansas City announced its intentions to back away from Obamacare exchanges, which could “likely leaves a swath of northwestern Missouri with no available marketplace plans for next year.” WSJ continued:

The nonprofit is the sole marketplace insurer in 25 counties in Missouri, according to the Kaiser Family Foundation. Unless another insurer steps in, people who purchase individual insurance plans in those counties will have no options on the exchange, and thus will be unable to obtain federal subsidies that help pay premiums for most enrollees.

Last year, Aetna and UnitedHealth caused waves when officials pulled out of most Obamacare exchanges. These companies have lost a lot of money, which has damaged the product they provide.

In February, Aetna’s CEO Mark Bertolini claimed Obamacare “is in a death spiral.” He made these comments at a WSJ event:

“It’s not going to get any better; it’s getting worse,” Bertolini said at a Wall Street Journal event.

“You saw my friend, Bruce, at Humana say, ‘We’re out.’ ”

Humana cited an unbalanced risk pool as its reason for the departure, meaning the company didn’t have enough healthy people enrolled in coverage to balance out its sick customers.

“That logic shows just how much the risk pools are deteriorating in the ACA,” Bertolini said.

He added: “I think you will see a lot more withdrawals this year. … There isn’t enough money in the ACA as structured, even with the fees and taxes, to support the population that needs to be served.”

Trump Points Out Obamacare’s Failures Again

President Donald Trump had some more harsh words for Obamacare today before he met with Congressional leaders Mitch McConnell and Paul Ryan. From Fox News:

The president lashed into ObamaCare on Tuesday by citing a recent report that shows premiums have increased in Alaska by as much at 203 percent and pointing out that another major insurance company just left the health care exchange in Ohio.

“If Congress doesn’t act to save Americans from this Democrat-inflicted catastrophe, next year is going to get worse,” said Trump, who praised Ryan for getting the GOP-led House last month to pass its ObamaCare overhaul package.

“It was a long and difficult negotiation, but it gives a great concept to Mitch,” the president said. “The Senate, I’m sure, will follow soon, get a bill across the finish line this summer.”


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So did Paul Ryan ever send his bill to the Senate?

This is reminiscent of the Fannie/Freddie debacle that centralized global debt redistribution and forced another recurring catastrophic economic misalignment. I guess some people can see history repeating itself on a decadal interval, and hope to avoid the financial rape.

As much as I hate to admit it, I think the Democrats have the better argument regarding Obamacare. The rate increases which have hurt so many small businesses and self-employed people are the result of the Republicans refusing to fund the Obamacare CSRs. Now the Republicans are realizing that if they don’t have a similar subsidy mechanism, people will not accept the resulting humanitarian catastrophe, so they come up with subsidized risk pools and the free market idolaters won’t let it pass.

The author of this article is most likely a partisan Democrat, but I think he is correct.

Reasoned counter arguments would be much appreciated. I don’t like my conclusions.

    Colonel Travis in reply to gibbie. | June 6, 2017 at 10:22 pm

    Nonsense. The ones who are to blame are Democrats. The (R) Congress hasn’t done anything about CSR payments because King Obama said he didn’t need Congress’s authority for CSR money and the money has gone out every single year. The House of Representatives took this clown to court about it (because the House didn’t have the cojones to stop Obama to his face) and last year a federal judge agreed with the House. Then the court order was suspended because of an appeal. Trump just said he wants to delay the appeal, so again, the money is going out. The payments haven’t been stopped by any (R).

    More importantly, how can you blame anything about Obamacare on (R)s (not counting doing nothing to get rid of it)? This entire mess was created by (D)s only. It was set up for failure from Day 1. Without billions and billions of dollars in subsidies, insurance companies would get out of Obamacare exchanges faster than they already have. The whole thing is a disaster and 100% of the blame goes to Democrats.

      gibbie in reply to Colonel Travis. | June 7, 2017 at 8:56 am

      Colonel Travis, Thank you for your informative reply. I’m a conservative living in the midst of Democrats.

      Is there anywhere I can direct my Democrats which would convince them that the CSR payments are being made (and how much)? This would be a big help.

    DDsModernLife in reply to gibbie. | June 6, 2017 at 10:28 pm

    “…refusing to fund the Obamacare CSRs.” Well, let’s spell it out: CSRs are “Cost Sharing Reductions.” And then, let’s peel off the label and what do we see? Redistribution of wealth.

      gibbie in reply to DDsModernLife. | June 7, 2017 at 9:13 am

      DDsModernLife, This is not a helpful comment. There are many examples of redistribution of wealth in our government: taxes in general, Social Security, Medicare, Medicaid, tax incentives for corporations, tax deductions, etc. My current favorite is the fact that hospitals are required by law to treat anyone who walks in the door, regardless of whether they can pay for the treatment. Which of these “redistributions of wealth” would you like eliminated?

      The AHCA “solves” the “pre-existing condition” problem by creating a separate market called “risk pools” which it then subsidizes. I can’t see the difference between this and Obamacare.

      With respect to Obamacare, the Republicans look like the barking dog which finally caught up with the car and can’t think of anything to do but pee on it. The Democrats are driving the car off a cliff.

notamemberofanyorganizedpolicital | June 6, 2017 at 8:27 pm

Forbes is not a reputable, unbiased source for anything imo.

buckeyeminuteman | June 7, 2017 at 9:11 am

Democrats – “Nothing to see here. Move along. Here’s a free Obamaphone to distract you from the worries of the world.”

When Trump does things like pulling out of the Paris accords, I’m willing to cut him some slack on getting rid of Obamacare. Talk about “redistribution of wealth”!

Albigensian | June 7, 2017 at 3:38 pm

Insurance is the business of buying and selling risk. In order for a risk to be insurable, insurers must be able to calculate the actuarial risk with reasonable accuracy. (And it must also be able to offer a product that enough people want to buy in order to cover overhead, and the downside risk, even if very unlikely, must not be so large that it could bankrupt the company).

BUT the redistributionist features of Obamacare make it impossible for insurers to accurately calculate risk. For example, it mandates that men and women of the same age pay the same premiums, even though women cost significantly more. And therefore if too many women and not enough men buy a company’s insurance the insurer will lose money.

But the disparity between risk and price is greatest regarding age. Under Obamacare, old people can’t be charged more than three times as much as young people, even though they cost more than three times as much to insure. Thus, if an insurer prices its insurance correctly (relative to risk) for young people it will have massive losses if too many old people buy it. But if they price it correctly for old people they’ll lose even more because it will then be so overpriced for young people that they’ll either buy from someone else or just pay the penalty and not buy at all.

Yet although eliminating the redistributionist elements may be necessary to stabilize the insurance markets, it’s not sufficient as it leaves pre-existing conditions, plus mandated availability of medical treatment to those who are uninsured and can’t pay.

Blanket coverage of pre-existing conditions creates an obvious moral hazard in that those who are reasonably healthy can be expected to buy insurance only if/when they become expensively sick. So, how much would collision insurance for a motor vehicle cost, if you could buy it after you crashed the vehicle?

And then there’s the mandate that hospitals and emergency rooms often can’t deny treatment to those who are uninsured and lack the ability to pay. If you earned a low-to-moderate income and had few attachable assets and were reasonably healthy, why wouldn’t you rely on that safety net, rather than buy costly health insurance you might never use?

So, medical insurance has moved out of financial marketplaces and into political marketplaces; everyone wants “affordable” medical insurance yet few would deny lifesaving medical treatment to those who could have bought insurance but chose not to, and why are few volunteering to pick up the tab for all this pass-the-bill-someone-else “affordability”?

And Obamacare is cratering because its cross-subsidies make it impossible for insurers to price their insurance correctly relative to risk, but it’s not as if there aren’t plenty of other potentially market-killing issues in addition to that. And who has much confidence that government can find a politically viable solution that is also financially viable?

    gibbie in reply to Albigensian. | June 7, 2017 at 5:48 pm

    Albigensian, Thanks for your informative comment. Clearly, some of the offensive aspects of Obamacare are due to political correctness.

    I can see how insurers would have an easier time setting prices if they had a customer base which didn’t include people with pre-existing conditions, but I can also see how people in the risk pools might feel rather nervous.

    I really appreciate your analysis in general, and my answer to your last question is “not me”.

    The “insurance” side is a mess. As another commenter has said in the past, we should be working hard on the “cost” side, rather than just the “insurance” side.