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Hullabaloo


Sunday, August 28, 2016

 

It is their nature

by Tom Sullivan

The drive to provide healthcare to all Americans, the effort that became Obamacare, had at its core an impulse to put people over profits. Finally. When the negotiations in Congress excluded a public option for consumers, that impulse failed. Congress and the president turned over the healthcare hen house to the for-profit foxes and made hens pay for the privilege.

Jon Schwarz put it succinctly at The Intercept:

There have been dozens if not hundreds of news articles about Aetna leaving the Affordable Health Care Act’s online marketplaces in eleven states, and whether this signals serious problems for Obamacare down the road.

But none of them have truly explained that what’s happening with Aetna is the consequence of a flaw built into Obamacare from the start: It permits insurance companies to make a profit on the basic healthcare package Americans are now legally required to purchase.
But Aetna did not simply abandon the online marketplaces. It was making good on a threat to kill them if regulators refused to acquiesce on its plans to merge with Humana. Bloomberg:
Aetna Inc. warned U.S. officials more than a month ago that it would pull out of Obamacare’s government-run markets for health insurance if antitrust officials attempted to block its $37 billion merger with Humana Inc.

In a July 5 letter to the Justice Department from Chief Executive Officer Mark Bertolini, Aetna said that challenging the merger “would have a negative financial impact on Aetna and would impair Aetna’s ability to continue its support” of plans sold under the Affordable Care Act. That would leave the insurer “with no choice but to take actions to steward its financial health.”

On July 21, the Justice Department filed its suit to block the deal, as well as Anthem Inc.’s acquisition of Cigna Corp. On Monday, Aetna announced a broad pull-back from Obamacare’s exchanges, citing larger-than-expected losses on its individual plans this year.
Our first impulse is to blame the evil bastards at Aetna, but that's like blaming the shark for biting. Putting profits over people is what corporations do. As the scorpion told the dying frog, it is their nature. The failure is in not taking that nature out of the equation.

Congressman Raul Grijalva of Arizona last week appeared in Time magazine to decry that outcome and to call again for a public option:
Since 2009, the arguments that I and others made have played out in real life. We said then that we needed a public option to create competition in the market place, help control cost and provide choice to consumers. The same is true today but now there is an even greater case for a public option—the need for added stability. With an assured public option, regulators will not be left to bow to demands of the private insurers like Aetna’s merger threat. It would also free consumers from the fear of backsliding to our old system that forced uninsured people to hunt for affordable coverage on their own. On top of that, the Congressional Budget Office continues to tout billions of dollars in savings from a public option as administrative cost and premiums are estimated to be lower. And perhaps most important, consumers will not be forced to buy private insurance.
Hullabaloo alum David Atkins finds irony in the situation we face a few years into this national experiment:
Many centrists ridiculed the progressive movement for its strident insistence on a public option in the first version of Obamacare, declaring that it wouldn’t be necessary, that it would make the Affordable Care Act too partisan, that insurance companies would work to kill the exchanges if it were enacted, etc. But on all counts progressives were right: it is necessary, the Affordable Care Act couldn’t possibly be more partisan than it already is, and insurance companies are already working to kill the exchanges because there just isn’t enough profit there for them.
Former Clinton labor secretary Robert Reich writes that the problem isn't Obamacare itself but "lies in the structure of private markets for health insurance — which creates powerful incentives to avoid sick people and attract healthy ones." He writes:
Insurers say they’re consolidating in order to reap economies of scale. But there’s little evidence that large size generates cost savings.

In reality, they’re becoming huge to get more bargaining leverage over everyone they do business with — hospitals, doctors, employers, the government and consumers. That way they make even bigger profits.

But these bigger profits come at the expense of hospitals, doctors, employers, the government and, ultimately, taxpayers and consumers.
Left unperturbed, The Market will cut costs and improve efficiency, say its true believers. The implied promise is always that efficiency for them means savings for you. Let's not delude ourselves that these behemoths ever had any intention of passing along their savings to consumers. Squeezing the maximum profit out of each consumer is their nature. If the Gipper had been a progressive, he might instead have frightened voters with, "I'm from the Company and I'm here to help you." And he would have been more honest.

When it comes to people's health, it's long past time to stop making deals with scorpions.