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OPINION

Obamacare's Woes Will Have Election-Year Consequences

The opinions expressed by columnists are their own and do not necessarily represent the views of Townhall.com.
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This is shaping up to be another bad election year for President Obama's failed agenda and his underperforming economy.

The economy is slowing to a snail's pace. Factory output fell in March for the second straight month. The Supreme Court is sending signals that Obama exceeded his legal authority to halt deportation of undocumented immigrants.

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And the economic viability of the Affordable Care Act, his signature achievement, is on shaky financial grounds, as health insurance costs skyrocket, according to industry analysts and major health insurance providers.

The problem facing insurers is a promise to health care companies that Obama couldn't keep: A wave of younger, healthier workers would sign up for Obamacare, offsetting the costs of older Americans who are far more expensive to insure. But younger people have not signed up in the numbers that the industry expected, hurting their bottom line and forcing them to increase premiums or pull out altogether.

UnitedHealth Group, the largest health insurer in the country, announced this month that it was pulling out of three of Obamacare's state insurance markets as a result of "huge losses" that threatened their financial survival.

The firm said it would move out of the Affordable Care program in Arkansas and Georgia after what were described as "dismal revenues." Then last week it said it would also withdraw from the Michigan health insurance market "to try to stem its losses," Reuters reported.

The Wall Street Journal, which broke the story, reported that industry analysts eventually expected UnitedHealth to "pull out of most, if not all, of the 34 states" where it is participating in Obamacare.

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The story, a political blockbuster by any standards, has been largely ignored by the network nightly news shows. But not by health care industry analysts, who have deep concerns about Obamacare's fragile financial future.

The chief executive officer of Aetna said it would be premature to declare Obamacare a total failure, but added that the health insurance firm "continues to have serious concerns about the sustainability of the (program's) public exchanges."

Obama and the Democrats who enacted Obamacare at the beginning of his presidency have stubbornly insisted throughout the past seven-plus years that premium costs would be "affordable" -- hence the name "Affordable Care Act."

It has turned out to be anything but that. A study from the Blue Cross Blue Shield Association found that "the average medical costs for a new individual in 2015 were 22 percent higher than employer-based group members," AOL's website reported.

Obama administration officials and Democratic leaders who hastily rammed the program through the Democratic-controlled Congress, without a single Republican vote, will no doubt attack "greedy" health insurers for raising their premiums. But a cost accounting report in February said insurance companies "lost money in 41 states in 2014, meaning they were profitable in only nine states that year," AOL reported this week.

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"Something has to give. Either insurers will drop out or insurers will raise premiums," said a health care analyst at the Kaiser Family Foundation.

For now, at least, the health care industry is suffering from buyer's remorse, wishing they had waited longer to measure Obamacare's over-hyped potential to make a profit.

"It was for us a bad decision," UnitedHealth's CEO Stephen Hemsley admitted at an investors meeting in New York last December. "In retrospect, we should have stayed out longer."

"UnitedHealth and Aetna both reported losses last year after the companies badly underestimated the cost of providing health care insurance to many individuals who turned out to be older and sicker than they had anticipated," Eric Pianin reports in The Fiscal Times. "It seems likely that more closures will follow."

In fact, that's what is happening, as UnitedHealth announced Tuesday that it will stop offering ACA plans next year in most of the 34 states where Obamacare operates.

What happens next? A "complete pullout next year would have a jarring effect" on Obama's health care program, "and could leave many consumers -- especially people living in rural areas -- with fewer choices in low-cost, government-subsidized coverage, according to a new study by the Kaiser Family Foundation," Pianin adds.

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None of this comes as a surprise to health care analyst Grace-Marie Turner, a chief critic of Obamacare who has closely monitored its troubles from the beginning.

"Many of us predicted what would happen -- costs would increase, millions of people would lose their doctors and their coverage, tens of millions of people still would be without coverage, and millions with coverage still would find it difficult to afford their premiums and medical bills," she wrote in Forbes magazine last month.

The early signs of Obamacare's collapse in the midst of a tough election year will no doubt add further political fuel to the GOP's campaign to replace it with something better and more sustainable.

And that will throw the Democrats, including Hillary Clinton, on the defensive, in a year when the biggest political issues seem to be in the Republicans' favor.

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