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Aetna, for-profit insurers do not serve public good

Written by Wendell Potter

The U.S. Department of Justice is trying to block Aetna’s merger with Humana. And, Aetna, along with other for-profit insurers, are pulling out of most of the Obamacare state exchanges, claiming that they are losing too much money. We must recognize and address the reality that for-profit insurers are not in the business of serving the public good.

Let’s be clear. Obamacare has served the for-profit insurers extraordinarily well. Aetna alone has made nearly $7 billion in profits since the launch of Obamacare in 2014, and its stock price has soared. Aetna’s stock price is more than six times higher than it was when debate began over the Affordable Care Act in 2009.

Aetna’s contention that it’s not viable for it to continue offering coverage in the exchanges, that they are getting too many enrollees with high health care costs, rings hollow. The non-profit insurers, such as Kaiser and Blue Cross, are managing to balance risk in the state health exchanges.

It is indeed true that the majority of people enrolling in the state exchanges are poor and in poor health and that there are not as many young, healthy people to enroll as the insurance industry would like in order to balance risk. But, it is also true that for-profit insurers feel obligated to exceed Wall Street’s expectations every quarter in order to drive up their stock prices. Any business unit that is not doing well jeopardizes their ability to do so. That motivates Aetna’s CEO to close down its line of business in the state health insurance exchanges.

What’s disturbing and makes the case for a public health insurance option in the state exchanges is that Aetna has no obligation to the public, no obligation to continue serving sicker poorer people in the state exchanges, even when its operating earnings are growing and the federal government’s Medicare and Medicaid programs are major growth areas. Indeed, its thanks to Obamacare that Aetna has so many more Medicaid enrollees.

The non-profit insurers are remaining in the state exchanges because they can take a long-term view. They do not need to please Wall Street every quarter. But, they alone cannot meet the needs of people in the state exchanges. In order to give people the choice of a health plan they can rely on, we need a public health insurance option like Medicare or an expansion of Medicare for people under 65.

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3 Comments

  • We have to make a change to our collective vocabulary when we describe healthcare in this country. When we speak of the public option, we mustn’t label it as “insurance”. Our healthcare system and the insurance industry are mutually exclusive entities and must remain that way for national healthcare to be viable. I’ve heard the insurance industry described as “A blood-sucking leech on the jugular of our healthcare system” and can’t think of a more appropriate way to put it.
    After the ACA was passed, the insurance industry gave us the illusion that they were embracing the law and proceeded to sign everybody up for health insurance. I was finally able to afford a decent health insurance plan through Preferred One. From all outward appearances, it was a huge windfall for the insurance companies but it soon became apparent that those companies had another agenda; to poison the ACA from within. In Minnesota, Preferred One was the first insurance company to bail on its customers, doing so after the first year. One article had them insuring up to 90% of the enrollees in Minnesota’s healthcare exchange so you can imagine what sort of effect that had on us. I was told that I could keep the plan I had signed up for, only now my monthly premium would increase by 300%, placing it well out of my financial reach.
    At the time, I saw this as a deliberate attempt by Preferred One to take down Minnesota’s healthcare exchange. That opinion is supported by recent reports that insurance companies all over the country are lining up to do the same thing. There is a solution to this planned exodus and it’s found under Section 1334 of the ACA whereby something tantamount to a multi-state, government exchange could be established. The real solution, however, would be to sign every man, woman and child up for Medicare and to fund it appropriately through changes in the tax laws. Ultimately, what must be done is to remove “insurance” from our healthcare lexicon and the insurance companies from our healthcare system.

  • …keeping the for profit insurance industry in the loop was one of the biggest flaws of the ACA. Mr Sanders proposal of a Single Payer Medicare for all plan like other nations have is what we need. This is something Mrs Clinton also sought after in the 1990s, however, she recently turned her back on it and now supports the current ACA structure.

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