It's Working: Another Health Insurance Giant Flees More Obamacare Markets

Guy Benson
|
Posted: Sep 28, 2016 10:25 AM
It's Working: Another Health Insurance Giant Flees More Obamacare Markets

Since everyone's still buzzing about Monday night's debate seen 'round the planet, I figured I'd offer some counter-programming. Hillary Clinton has said on multiple occasions that Obamacare is "working," but that it needs some "fixes" such as an even bigger government role and more taxpayer funding. Just last week, Harry Reid claimed that Americans who read the news know that the law has been a positive for the country. (Click through on those links for our detailed rebuttals at the time). The ongoing reality is that this failed, unpopular, party-line policy experiment is collapsing under its own weight. The latest out of Nebraska:

The decision by Blue Cross Blue Shield of Nebraska to leave the Affordable Care Act’s individual insurance marketplace may awaken officials to the need for change, the head of the state’s largest health insurer said Friday. If not, said Blue Cross CEO Steve Martin, there’s no end in sight for the losses that he said forced the Omaha-based insurance company to remove itself from the exchange for 2017, only hours before the deadline to stay or leave. Although Blue Cross’ individual exchange policies cover only about 20,000 of its 750,000 customers, those policies have lost $140 million since 2014. If Blue Cross remained in the market, it estimated that the loss could reach $250 million by the end of 2017. “We cannot take another hit,” Martin said.

New day, same story: Insurers cannot afford to participate in these exchanges because new Obamacare enrollees are disproportionately older and less healthy than the administration had projected, while younger and healthier Americans are declining to sign up for coverage because it's unaffordable.  And thus the Blue Cross Obamacare exodus is well underway, on the heels of similar announcements across the country from other major insurers, including United Health, Humana, and Anthem.  And remember this dire warning from Tennessee's insurance commissioner?  She's looking more prescient than ever.  Surprise:

BlueCross BlueShield of Tennessee will not sell insurance plans on the Obamacare exchange in the state's three largest metro areas next year, as the health care giant grapples with hefty losses and ongoing uncertainty on the marketplace. The insurer made "an extremely difficult but necessary decision" to leave the Nashville, Memphis and Knoxville markets as it tries to manage its number of members to hit a break-even point amid three years of losses, said Roy Vaughn, chief communications officer of BCBST. "It’s not something we want to do but we believe we must look out for the health care and financial security for all the members that we serve," Vaughn said in an interview with The Tennessean. The company formally made the change to its 2017 plans in a Friday filing with the U.S. Department of Health and Human Services — roughly a month after it raised the possibility of scaling back. Earlier this summer, BCBST requested — and was granted — state approval for an average 62-percent premium increase. The rate hike is still pending federal approval.

BCBS requested and received approval to impose bruising new rate hikes in 2017, yet they still couldn't make the math work.  It's developments like these that caused health insurance industry expert Bob Laszewski to admonish consumers that the whole system could fall apart within a year unless a political solution is achieved.  Such a solution is highly unlikely, for reasons Philip Klein explained in a recent column.  One of the dynamics at play in Indiana's contested Senate race is Democrat Evan Bayh's vocal support for an insurance industry bailout using taxpayer dollars.  This is a very unpopular idea -- except, perhaps, to a liberal corporate lobbyist like Bayh.  Every GOP Senate candidate should work hard to get their Democratic opponents on the record for or against such bailouts, which the White House supports.

Premium increases will be formally rolled out in the days immediately preceding the fall election. And don't forget your insurance insurance for spiraling out-of-pocket costs.