EDITORIAL: Aetna pullout reveals a real, but fixable, flaw in Obamacare
Rather it demonstrates that a fundamental flaw baked into the Patient Protection and Affordable Care Act of 2010 has now surfaced. In drafting the act in 2009, President
Private insurers kept access to the enormously profitable, and expanding,
The big flaw came in the state and federal exchanges selling individual policies. The insurers got access to a giant pool of new customers but had no real idea how to price their risk. In retrospect, it shouldn't have been a surprise that people buying health insurance for the first time were going to be sicker than those who'd had it for a long time. If you've never had insurance, you've probably put off getting care.
The newly insured found doctors. They got surgeries they'd been skipping. They got prescriptions for chronic ailments. They appear to be healthier as a result. But it has cost insurers far more than they expected, in part because younger, healthier customers didn't sign up for health care, preferring to risk a tax penalty if they got sick. The pool was overloaded with sick people.
In his announcement Monday, Aetna CEO
Many companies see short-term losses as a kind of down-payment on future profits. This is precisely how Aetna saw the individual marketplace in April, when Bertolini said the markets were a "good investment" because profits would eventually roll in.
Then the
The problems with Obamacare can and should be fixed, but not by allowing insurance companies more power. The Obama administration is planning an advertising campaign aimed at convincing "young immortals" to buy insurance. That seems unlikely to make a huge difference. In the short run, people who buy policies on health exchanges are at the mercy of insurance companies, who will offer fewer choices at higher prices.
Real change will come only in revisiting the public option. Obama, writing in the
If Clinton is elected, and if there's enough turnover in the
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