EDITORIAL: What others are saying: Obamacare

Aug. 21--Outside the legal challenges it previously faced, the Affordable Care Act has never been as threatened as it is right now.

President Barack Obama's signature law has so destabilized the individual market for insurance that three large companies have announced they are better off not participating in the exchanges.

Aetna last week announced it will exit 11 of the 15 states where it has offered plans through ACA exchanges, while UnitedHealthcare plans to exit 30 of its 34 states, and Humana is pulling out of 88 percent of the counties where it offered coverage.

While these big players are cutting their ACA losses, they're fortunate enough to have other business lines to fall back on. Without those buffers, the new health insurance cooperatives that started with funding through the ACA have mostly collapsed. To date, 16 of 23 have failed, taking billions of dollars in taxpayer loans with them.

As insurers exit and fold, the choices available to people will plummet next year.

Insurers were hopeful that the ACA could offer a major profit opportunity for them. They were set to receive tens of billions of dollars in several types of government subsidies as well as the enactment of an unprecedented federal penalty if people failed to purchase their product. Washington delivered the subsidies and the penalty survived a major constitutional challenge. But, the law is producing large insurer losses and significant instability in the individual market. Why?

The explanation is simple: The coverage is extremely unattractive to the vast majority of potential buyers.

Every plan covers an extensive list of services, some of which are unwanted, and the plans generally have very large premiums and deductibles.

For example, the cheapest unsubsidized bronze plan (covering about 60 percent of expected health care expenses) available to a family in Winston-Salem, N.C., has a yearly premium of $11,760 and a $13,700 deductible. The cheapest unsubsidized silver plan (covering about 70 percent of expected health care expenses) has a yearly premium of $13,872 and a $10,000 deductible. In addition to high premiums and deductibles, far fewer doctors and hospitals are covered by exchange plans relative to other types of plans.

The Obama administration has attempted to prop up insurers with as much taxpayer money as possible, including roughly $7 billion in payments in 2014 and 2015 that a federal judge ruled unconstitutional because the funds were not appropriated by Congress. The subsidies and corporate welfare have not worked. As choices diminish and premiums soar -- they're likely to rise by an average of 25 percent next year -- people will rightly demand change.

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