Via CNBC, an appropriate companion story to Moody's decision to downgrade health insurers' credit outlook to "negative." At least one chief executive within the industry is openly warning markets and consumers that actions -- and math -- have real-world consequences, no matter how hard political actors spin:
Aetna CEO Mark Bertolini told CNBC on Wednesday that Obamacare has failed to attract the uninsured, and he offered a scenario in which the insurance company could be forced to pull out of program. The company will be submitting Obamacare rates for 2015 on May 15. "Are they going to be double-digit [increases] or are we going to get beat up because they're double-digit or are we just going to have to pull out of the program?" Bertolini asked..."Those questions can't be answered until we see the population we have today. And we really don't have a good view on that." He said that so far, Obamacare has just shifted people who were insured in the individual market to the public exchanges where they could get a better deal on a subsidy for coverage. "We see only 11 percent of the population is actually people that were firmly uninsured that are now insured. So [it] didn't really eat into the uninsured population."
That brief excerpt underscores several intractable problems with the president's healthcare law. (1) The risk pools' demographics aren't shaping up to be healthy enough to make the exchanges work well. (2) If insurers eventually begin to sever ties with Obamacare, the remaining plans will face an even more acute scarcity crisis. In other words, "access shock." (3) Climbing premiums appear to be a fact of life under Obamacare, which was sold as an antidote to the problem. (4) Very few of the "newly" insured within the exchanges were previously uninsured -- the very population that this expensive law was ostensibly designed to help. In light of those struggles, Jonah Goldberg poses the rhetorical question that many Americans are asking themselves: So what was the point of Obamacare, again? Bertolini went on to comment that because Obamacare represents such a small sliver of Aetna's business, the prospect of a health insurance bailout is basically a non-factor for his company. That won't be the case for other insurers, however, and I'd imagine that a (scheduled) industry bailout won't go over particularly well with the public, for reasons outlined by Megan McArdle:
Summer 2014: Insurers get a sizable chunk of money from the government to cover any excess losses. When the costs are published, this is going to be wildly unpopular: The administration has spent three years saying that Obamacare was the antidote to abuses by Big, Bad Insurance Companies, and suddenly it’s a mechanism to funnel taxpayer money to them?
Those costs may not be published until 2015. I quoted McArdle's piece at some length yesterday, and I'd encourage you to read the entire thing. She and another Obamacare opponent debated two supporters of the law on the hyper-liberal, tony Upper West Side of Manhattan earlier in the week. And they won. Here is a digestible highlight reel from the exchange, produced by AEI. McArdle and Dr. Gottlieb prevailed by simply comparing Obamacare to its own benchmarks and promises:
For your reference, a "win" in this forum is determined by which side persuaded more people, based on pre- and post-debate votes from audience members. Obamacare's critics doubled their percentage of the vote among a crowd that is heavily inclined to support the president and his liberal policies.