United Healthcare, the country’s largest health insurer, announced that it will pull out of all but a few state exchanges. It expects to lose $650 million this year alone on Obamacare business. Other companies are also losing money. A number of nonprofit cooperatives have already gone belly up.
The problem is simple. New people that are coming into the program are much sicker than the existing customer base.
In a larger sense the problem goes back to when the legislation was written. It is an enormously complex bill. Remember Nancy Pelosi saying they had to pass it to know what’s in it? Its entire focus was to increase the number of people insured. The only thing affordable about the Affordable Care Act was its name. The Obama administration showed total disrespect for the American people who were overwhelmingly against. President Obama repeatedly told a bald-faced lie by telling people they could keep their insurance or doctor. Congress resorted to special deals and parliamentary hocus-pocus to get it through.
So what should we do? Ideally it would be nice to scrap it and start over. Unfortunately that seems unlikely given the current political divide. Both parties should work together to reform it and make health care more affordable. There are no magic fixes but tort reform is the place to start. Not only do doctors have stratospheric malpractice premiums but it is estimated that 25% of all tests are ordered to protect them in the event of a lawsuit. Unfortunately, trial lawyer are Democratic cash cows.
Hopefully Democrats and Republicans can get together some day but I’m not holding my breath waiting.
Disclosure: I worked in the health insurance industry back in the 20th century.