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A Shrinking Marketplace
Author: BobR    Date: 08/17/2016 13:54:38

During the primary season, I was aggravated with the news media (in particular - MSNBC) for focusing almost exclusively on the Republican Clown Car (mainly tRump), and barely covering the Democratic primary. At this point, it's all tRump -vs- Hillary, with negative news about both dominating the news cycles on all the networks (cue Don Henley's "Dirty Laundry").

I have found that we here at FourFreedomsBlog are perhaps guilty of the same thing. So in an attempt to break the cycle of abuse, I am going to veer off on a tangent today - the ACA (aka: Obamacare).

Nearly three years ago, Raine wrote an excellent piece on path dependency. The term describes how we arrive at certain situations due to limited options produced by previous decisions. Think about our dependence on gasoline: we used to travel mainly by train. However, once the highway system was built, gas-powered automobiles became preferred, and the train system disappeared, making it no longer an option. The financial power of the petrol industry grew, allowing it to pressure automobile companies to produce only gasoline vehicles. Entire industries and infrastructures grew out of that dependence, making it that much more difficult to choose a different path.

Such was the path we took to private employer-provided health insurance programs (as described in Raine's blog, linked above). I won't go into the details, and simply repeat everything already written. The two main purposes of the ACA were to reign in the insurance companies' power, and ensure everyone could be covered. The former goal was pretty well handled: no more dropped coverage, no more denied coverage, no more rate hikes after a claim, and a required minimum level of coverage. These are all welcome reforms that were long overdue. No one should go bankrupt because of a health crisis.

The latter aspect of the ACA - ensuring coverage - was the part that was not so well designed. it's a kludgey mishmash of "insurance marketplaces", medicare expansion (made optional to the states), and the "dreaded" mandate. The idea behind the mandate was sound and a pacifier to the insurance companies: if everyone has to have coverage, then healthy people will help offset the cost of the mandatory coverage of the less healthy. It made sense on paper.

However, the realities of loophole-seeking-lawyers, limited options in the marketplace, and a libertarian element in the populace who would rather pay the tax penalty and risk going without insurance has made this a nightmare for the covered and the coverers alike. Insurance companies have decided they'd rather go with a smaller market share, than take on all the previously uninsurable now getting the healthcare they've been denied. Aetna is the latest to bail out of the exchanges:
Health insurer Aetna Inc. will stop selling individual Obamacare plans next year in 11 of the 15 states where it had been participating in the program, joining other major insurers that have pulled out of the government-run markets in the face of mounting losses.

Aetna will exit markets including North Carolina, Pennsylvania and Florida, and keep selling plans on state exchanges only in Iowa, Delaware, Nebraska and Virginia, according to a statement Monday evening. In most areas it’s exiting, Aetna will offer individual coverage outside of the program’s exchanges.


Next year will be Obamacare’s fourth of providing coverage in the new markets. Aetna’s decision doesn’t affect people covered by the company this year, but when they look for coverage next year, they’ll need to pick a new insurer. The decision, which affects about 80 percent of Aetna’s customers in individual ACA exchange plans, raises the prospect that some consumers will only have one insurer to choose from when they buy 2017 coverage.

Both Republicans and (candidate) Bernie Sanders have called for scrapping the ACA. The Republicans would prefer a more Ayn Rand influenced system where you're on your own. Sanders wanted to implement a new single-payer system. The Republicans' plan is cold-blooded, and Sanders's plan is unrealistic due to the previously mentioned path dependency. We couldn't even get a "public option" in the ACA when the Dems controlled both houses of Congress.

Clinton is pushing for fixing/updating the ACA with needed changes, including a public option. That wasn't achievable before, but now that we've all seen how the ACA transitioned from idea to working program, it might be more feasible, especially if Dems can win back the Senate and House (or at least narrow the Republicans' margin there). Something needs to be put in place, though, or the health insurance marketplaces will resemble the boarded-up downtown areas of small towns after Wal-Mart moves in.

22 comments (Latest Comment: 08/17/2016 19:47:57 by Raine)
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