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Death Spiral Disaster: Last Major Insurer Reportedly Plans to Abandon Most Obamacare Markets Next Year

One of the consistent and factually-correct refrains from Republican critics of Obamacare -- the president especially -- is that the current law is failing and getting worse.  Democrats inadvertently confirm this reality when they accuse Republicans of "sabotaging" the law by allowing it to be followed as-written.  Unstable risk pools disrupted by adverse selection are driving costs up, healthier consumers away, and carriers out of the market.  The result is a toxic trend of costlier coverage with fewer options, purchased disproportionately by sicker consumers -- which only deepens the unhealthy fiscal trajectory.  In short, the clear markings of a "death spiral" in progress, which is why one top healthcare CEO used that term to describe the status quo, setting up a controversy we covered earlier in the week in which a left-leaning "fact checker" is doing its best to paper over this ugly reality through semantics games and general sloppiness.  Following the demise of the American Health Care Act, which some providers supported as a means of stopping Obamacare's bleeding, the laws of economics are wreaking further havoc on the law.  This is an absolutely devastating development for the solvency of Obamacare:

Anthem Inc is likely to exit from a large portion of its Obamacare individual insurance markets next year, Jefferies analysts said, nearly a week after Republican leaders pulled legislation to overhaul the U.S. healthcare system. Anthem is one of the few health insurers that still sells plans under Obamacare. Humana Inc, Aetna Inc, and UnitedHealth Group Inc pulled out after reporting hundreds of millions of dollars of losses. Anthem is leaning toward exiting a "high percentage" of the 144 rating regions in which it currently participates, Jefferies analysts said in a note on Thursday after talking to the health insurer. Obamacare, former Democratic President Barack Obama's signature legislation created by the Affordable Care Act of 2010, has had a tough beginning. The mix of sick and healthy customers has been worse than expected, and premium rates on the individual insurance market went up 25 percent this year. The Republicans' failure to repeal Obamacare, at least for now, means it remains federal law.

Thanks to Obamacare's slow-motion implosion, just one single provider remains as a "choice" for consumers who live in roughly one-third of all US counties. In many of those places, Anthem has been that last holdout insurer, which is now reportedly about to end in 2018. Millions of Americans could be left with zero marketplace options, as the planned withdrawal of the last remaining US healthcare giant from most areas marks the latest sign that Obamacare is an unworkable actuarial nightmare.  In a new Fox News national poll, Americans split approximately evenly in their approval and disapproval of Obamacare -- a decent public opinion outcome for the law.  But that result comes on the heels of a bombardment of negative headlines about the GOP replacement plan, including from many conservative sources.  And it comes months removed from news of Obamacare's enrollment shortfalls, receding coverage offerings and soaring price tags.  But all of those statistics are going to look really bad again this coming fall, when Americans will be reminded of those realities.  Even with the "good" news stretch for Obamacare, a plurality of respondents in the poll still believe that if it's left alone, the law will collapse.  The Anthem development confirms why that's an evidence-based conclusion to reach.  And then there's this nugget:


This should embolden Republicans and encourage them not to abandon their biggest campaign promise in recent memory. They must fashion a better bill that deals with critical policy challenges in a more productive way, perhaps taking advantage of reconciliation-related opportunities they didn't recognize were available to them until very late in the previous process. Millions of people continue to be actively harmed by an unpopular law that is still deteriorating. Unify and do your job, GOP.

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