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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