Tipsheet

It's Failing: Blue Cross Blue Shield Abandons Obamacare in Nebraska

Guy Benson
Guy Benson  |  June 05, 2017 10:31 AM

As one of the few major carriers that hasn't announced sweeping plans to pull out of Obamacare's crumbling marketplaces nationwide, Blue Cross Blue Shield is sometimes touted by the failing law's defenders as a tenuous "success" story.  They occasionally point to a narrowly-tailored study that purports to demonstrate that the exchanges may be turning a corner toward profitability.  This optimism flies in the face of a drumbeat of business decisions made by numerous insurers over recent years, based on cold, hard accounting calculations.  For many of them, despite Obamacare's ineffectual requirement that everyone in America purchase their products, participation in the law has racked up hundreds of millions of dollars in annual losses (further underscoring the silliness of the Congressional Budget Office's religious faith in the power of the mandate tax).  BCBS might be a ray of hope, we're told, based on some data and projections.  But as we've seen in greater Kansas City and the entire state of Iowa, reality is once again intruding on the company's balance sheets -- this time in Nebraska:

Health insurer Blue Cross Blue Shield announced Thursday that it would not be participating in the invidual market in Nebraska next year, and the remaining insurer hasn't decided if it will leave also. Blue Cross Blue Shield is projected to lose $12 million this year from offering plans in the state, and the company would need to increase its price for premiums next year by 50 percent. The company previously participated in the Obamacare exchanges, which resulted in $150 million in losses...About 100,000 Nebraskans purchase their health insurance through the Obamacare exchanges, which allow most enrollees to receive tax subsidies to pay for their plans. Medica is the other insurer offering plans on the exchange in Nebraska.

Nebraskans purchasing insurance on the Obamacare-dominated individual market are down to just one "choice" in coverage, and that remaining carrier is also contemplating its future in the state.  The Obamacare chorus, exulting in recent polling showing that the law is less unpopular than ever before (sentiments likely driven by dishonest demagoguery against a GOP replacement proposal, anti-Trump polarization, status quo bias, and the fact that most Americans are not affected by turmoil in the individual market), are trying to blame the ongoing upheaval on Republican-caused "uncertainty" and "sabotage."  There is some evidence that a continued lack of clarity on the future of certain bailout-style reimbursement payments to insurers is contributing to some of the skittishness, but this terribly-written and promise-shattering law is sabotaging itself -- and has been for years.  The underlying problems of Obamacare's unsustainable risk pools and adverse selection dilemma have nothing to do with Republicans.  They're inherent, destabilizing flaws in the law itself, which was written and imposed entirely by Democrats.  Premium hikes and access shock have been enduring flaws, long predating Donald Trump's presidency.  The fundamental issue, as Nebraska's Governor correctly notes, is the unworkable structure of Democrats' disintegrating scheme:

Medica Health hasn’t decided whether to offer plans next year that meet the Affordable Care Act’s standards. If Medica joins the ranks of health insurance companies leaving the individual marketplace because they have been losing millions of dollars, Nebraskans seeking individual policies may not be able to find health plans at any price...Nebraska Gov. Pete Ricketts said Blue Cross’s decision “demonstrates the failure of Obamacare and how the system was so poorly designed that great companies like Blue Cross Blue Shield can’t stay in the marketplace. It highlights that Congress needs to act to make the health care system sustainable.” An additional 86,000 people in Nebraska have ACA plans this year, about 50,000 of those from Aetna Health, which decided last month it wouldn’t offer the plans in 2018 because of financial losses. That will leave only Medica, which covers about 36,000 people this year.

Recent public opinion surveys have shown that only 40 percent of voters support the House-passed American Health Care Act as written, with most wanting to see significant changes in the Senate. Major shifts in the law are virtually inevitably as the upper chamber does its work, which is currently being debated by a 13-member working group. According to a Senator involved in those negotiations, differences over 'essential health benefits' are being overshadowed over disagreements about the rate at which Medicaid outlays should increase in the future; moderate GOP Senators would like to see a more generous standard growth rate, while more conservative members prefer that benchmark be pegged at a lower clip.  Regardless of polling and policy details, the current system is falling apart, necessitating a replacement.  Even extremely liberal states are beginning to contemplate a post-Obamacare future, with California taking another step toward an economically ruinous (that's not hyperbole) single-payer system. The plan would more than double their entire state budget, which is already in bad shape, and sponsors have offered zero concrete plans for how to pay for it. But facts and empirical reality aren't meaningful obstacles to California Democrats:


Good luck with that, California taxpayers. And I'm looking at you, working- and middle-class families; not "the rich." I'll leave you with this since-deleted incitement of Obamacare, via Deputy DNC Chairman Keith Ellison in the wake of the awful Portland killings: