A follow-up on this week's major Obamacare tremor -- which has been covered as more of a blip than a bombshell in the media, partially because of the bizarro-world nature of our current political environment. Many conservatives warned during the roiling debate over the unpopular law that its structure would erect perverse incentives that would threaten the viability of its exchanges once the taxpayer gravy train stopped chugging. That's exactly what's happened, with the inevitable reckoning being hastened by Congressional Republicans' taxpayer-defending reforms. Providers have discovered that sicker and older people, who are more expensive to cover, are more likely to sign up for plans, whereas younger and healthier consumers are staying away from the marketplace due to its high costs. After all, if and when they get sick or injured, Obamacare requires insurers to take them on as clients at comparable rates to everyone else. This moral hazard dynamic has resulted in enormous financial losses, outlined in a landmark study from Blue Cross/Blue Shield. These companies have fiduciary responsibilities to their employees, customers and shareholders, so they been forced to beat a tentative -- then rapid -- retreat away from the failing law. CBS News correctly identifies Aetna's departure as a "big setback" to Obamacare:
In response to the news, Obamacare architect Zeke Emanuel appeared on CNBC and peddled the Democratic conspiracy theory that Aetna is retaliating against the Obama administration's decision to block a merger with Humana. The company might be cooking the books for political reasons, Emanuel claimed, allowing himself some slippery wiggle room when hosts confronted him with black-and-white numbers, challenging him to come out and accuse Aetna of something. He wouldn't, resting instead on innuendo:
A few points:
(1) If Aetna really had it in for Obama and his law, they've exhibited that animus in an unusual way. They've participated in Obamacare across the country for years, finally hitting the eject button only when the losses piled inexorably higher. And upon their announcement of that decision, they expressed regret and voiced support for the law: “As a strong supporter of public exchanges as a means to meet the needs of the uninsured, we regret having to make this decision,” the company's CEO said. Sounds like a fierce tea party-aligned Obamacare opponent, doesn't he?
(2) It's not like Aetna is the only large insurer to make this move. United Health, the nation's biggest provider, has done the same thing. As has Humana. BCBS has started moving in that direction, as well. This is an industry-wide problem, rooted in simple math. If Emanuel and friends have a shred of evidence that Aetna was lying about losses, they could present it. They don't. Paranoid scapegoating is fun, but law is the problem here.
(3) You may recall that Emanuel was enlisted to spin the United Health portion of this slow-motion trainwreck back in April by claiming that it was no big deal -- and not at all a sign of things to come, no sir. Everyone just relax:
Now that another domino has fallen, Emanuel seems to have abandoned the "nothing to see here!" talking point, in favor of "it's all political!" Neither is convincing because neither is true. While were at it, it's probably worth mentioning fellow Obamacare central planner Jonathan Gruber, Emanuel has made a number of admissions against interest about his law: For example, he's conceded that it is not containing costs, and that the "keep your plan and doctor" pledge lacked some highly relevant fine print. Gruber, of course, sprinted away from his truth-telling the nanosecond it became a potential existential threat to Obamacare. Fortunately for him, he was bailed out by a Supreme Court that was willing to ignore the plain legislative language in question.