While Democrats Celebrate, Obamacare Continues to Decimate Insurance Markets
“I imagine many of our colleagues on the other side of the aisle are celebrating, probably pretty happy about this,” Senate Majority Leader Mitch McConnell said from the Senate floor after a bill to repeal parts of Obamacare failed to pass. “This is a disappointment, a disappointment indeed.”
“Our constituents have suffered through an awful lot under Obamacare, we thought they deserved better, which is why I, and many of my colleagues, did as we promised, voted to repeal this law.”
They did deserve better. They do deserve better. Which is why the reaction to Republicans’ efforts to repeal Obamacare are telling. Democrats cheered at its failure, and in so doing, they encouraged the steady rise of premiums, they were heartened by the thought of unaffordable deductibles, and they elated in the dramatic loss of choice.
To square the consistently discouraging news about Obamacare with the idea that it’s survival is deserving of praise requires increasing levels of self delusion. Something that, as Megan McArdle writes for Bloomberg, Democrats are becoming very good at:
[T]he law’s supporters have been engaging in some energetic goalpost-relocation as premiums have risen and enrollment leveled off. So the fact that Ohio found insurers willing to sell in most of their counties is presented as good news, because hey, that’s only one county in Ohio where no one can buy insurance! People talk excitedly about how this or that state government has found a way to reduce premiums — a way that turns out to consist of pouring extra subsidies into the system. And huge rate increases are waved away because at least they’re not as huge as last year’s. A fictional sales patter I once saw conjured: “Sure, 37 mph isn’t very fast for a sports car, but you have to compare that to hopping!”
Large swathes of the country have only one insurer, and a few may have none. (Those places tend to have little in the way of population, to be sure, but who in 2010 would have said that “success” for Obamacare included completely destroying any rural insurance markets?) In many places, recent premium increases have rivaled or surpassed the kinds of hikes that were once presented as the reason we needed to pass Obamacare. And enrollment has stopped growing well short of market saturation, which means that yes, the individual markets are still vulnerable to a death spiral, particularly in the off-exchange, unsubsidized segments.
Indeed, the news over the past two weeks hasn’t been encouraging.
With the September deadline for insurers to decide whether to participate in the exchanges looming, additional insurers are beginning to drop out of the market.
The nation’s largest insurer, Aetna, announced its decision to withdraw from Nevada, the last exchange it was participating in. Molina, is pulling out of two additional states (Utah and Wisconsin), reducing its footprint in Washington, and is reviewing all of its marketplace offerings to ensure sustainability. In the states where Molina is remaining in the marketplace, they are increasing premiums by an average of 55 percent, the result of a net loss of $230 million in the second quarter. And Anthem announced that it is almost completely leaving Ohio, Wisconsin, Indiana and California.
“Today, planning and pricing for ACA-compliant health plans has become increasingly difficult due to a shrinking and deteriorating individual market, as well as continual changes and uncertainty in federal operations, rules and guidance, including cost-sharing reduction subsidies and the restoration of taxes on fully insured coverage,” Anthem said in a press release.
The Centers for Medicare and Medicaid Services has been able to quantify that level of deterioration. According to data they provided there will be 1,332 counties (over 40% of the counties nationwide) in the United States that will only have one health insurer operating in the exchanges, and another 40 counties with no insurer.
None of this is good news. None of this is worth celebrating. But Democrats will nevertheless rejoice for no other reason than the simple pleasure of denying a political win for Republicans. Sadly, so long as Democrats keep celebrating, Americans keep hurting.