I told you so: Obaminablecare is starting to fail

I have said it before: The left never really cared if the Affordable Care Act would work; they just wanted something that could pass, to establish the principle that government was ultimately responsible for providing health care coverage. And now, with the American Health Care Act — Obamacare Lite, as many have called it — having failed, the Affordable Care Act remains in force, almost unchanged since President Trump took office,1 and it is failing:

The first place Obamacare could die

by Tami Luhby | April 4, 2017: 7:21 AM ET

Whether or not Obamacare will explode in the near future is a matter of debate.

But if it does, it likely wouldn’t be a massive death spiral across all 50 states. It would die in specific regions because all the insurers there pull out.

Knoxville, Tennessee, may be the first place where Obamacare fails. Humana (HUM), the only insurer on the exchange there, is exiting the market in 2018. Unless another carrier steps in, roughly 40,000 people in the 16 counties in and around Knoxville could be left without the option to buy a subsidized insurance policy.

The lack of competition on many of the exchanges is one of Obamacare’s biggest problems. One in five consumers have only one choice this year, up from 2% in 2016, according to the Kaiser Family Foundation.

Pinal County in Arizona almost became the first Obamacare casualty last year after Aetna (AET) scaled back its participation. But the Obama administration and state regulators worked to bring Blue Cross Blue Shield of Arizona back to that area, said Cynthia Cox, associate director at the Kaiser Family Foundation. It had pulled out earlier.

There’s a good deal more at the original.

The problem really is simple: the private health insurance system, on which the Affordable Care Act is based — and on which the AHCA would also have been based — is a competitive system of companies which exist for the sole purpose of making a profit.2 The Obama Administration, never truly concerned with the profitability of American businesses, festooned the ACA with all sorts of regulations designed to provide more and more goodies to the insured, without any (serious) concern as to whether insurance companies could provide those goodies and still make a profit. Yet now, even with a much more business-friendly regulatory environment in Washington, Humana’s corporate leadership apparently do not believe that they can continue to make a profit in and around Knoxville.

Consider the health insurance business environment that Humana might abandon: it had a complete monopoly in the ACA exchanges, meaning that it faced no competition. The quoted CNNMoney article noted that premiums had increased between 44% and 62% in Tennessee this year, and the company still believed that this was not a sufficiently profitable situation. Roy Vaughn, a senior vice president for Blue Cross/Blue Shield of Tennessee, whose company state Insurance Commissioner Julie McPeak is trying to lure back to the Knoxville area exchange, noted it was difficult to see a way to profitability, and that his company had lost $400 million on the exchange over the past three years. How, exactly, will the state entice the company to lose even more money?

The laughably-named Affordable Care Act is failing, just as conservatives have said all along would be the case. It was always doomed to failure, because, in the end, you cannot expect a capitalist private corporation to provide a socialist benefit; economics simply does not work that way.

Eventually we will have single-payer. Oh, it won’t be good health care under single-payer, but it will be health care . . . sort of.
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  1. The law itself remains unchanged, but the Secretary of Health and Human Services, Tom Price, can change the regulations imposed through the law, and is expected to do so.
  2. Selling health insurance isn’t their purpose, but simply their method of making a profit.

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