Insurers: Um, we're losing hundreds of millions on ObamaCare enrollees

Off the cliff.

, --February 4, 2016

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One thing that occurred to me as I got myself set up to write this: I honestly don't think many ObamaCare fans will be given pause by the news that follows, because in the world of their imaginations, insurance companies making money is/was the problem in the first place. So if they're now losing hundreds of millions, good! They probably figure they've got bazillions of gajillions where that came from, and hey, people are covered, so what's the problem here? In real world, of course, yikes:
This week, Aetna CEO Mark Bertolini warned that “we continue to have serious concerns about the sustainability of the public exchanges.” Aetna lost more than $100 million last year on the 750,000 enrollees it has through ObamaCare exchanges. Bertolini’s warning comes after UnitedHealth Group (UNH) announced that it might pull out of ObamaCare entirely next year, after getting hit with a $475 million loss in 2015. It expects to lose another $500 million this year. Last fall, CEO Stephen Hemsley said that “we can’t really subsidize a marketplace that doesn’t appear at the moment to be sustaining itself.” That, he said, “basically is an industry-wide proposition.” Anthem (ANTM) CEO Joe Swedish said on his earnings call last week that “we aren’t experiencing the overall market growth on the public exchange that we projected when we laid out our five-year plan.” And Blue Cross Blue Shield of North Carolina, meanwhile, expects to lose $400 million on its first two years of ObamaCare. It was able to get rate increases in the state that averaged 32.5%.
That’s not to mention the fact that more than half of the non-profit insurance co-ops that ObamaCare created have since failed. Turns out that not only is ObamaCare failing to attract enough young and healthy, it has also encouraged others to game the system by waiting until they get sick to sign up for coverage, outside the three-month open enrollment window. Aetna and UnitedHealth say that these people use more health care than those who sign during open enrollment and in many cases drop coverage once their medical bills get paid.
I cannot for the life of me understand why anyone failed to see this coming. If no one can be denied coverage based on a pre-existing condition then why would anyone sign up when they're not sick? Liberal ObamaCare defenders deride these people as "young invincibles," people who don't buy insurance because they think nothing will ever happen to them. Sounds like they're pretty smart to me. They don't buy it when they're healthy because the law says they can't be turned down if they do get sick. So why waste your money? That's why Congress made it mandatory, which only proves what a racket it is. No one who really understands the value proposition here would see it as a good buy. That's why enrollment continues to disappoint, even though the IRS will fine tax you for not signing up. The pool of insureds is disproportionately sick, and that means the insurers are losing their shirts. Plus, thanks to Marco Rubio, the administration won't be able to just bail them out - which it knew all along it would probably have to do. Why is that good? Because at some point, even if we do get another Democrat president, it's going to force the administration to the table to negotiate real changes to ObamaCare as the price of saving the insurance market. If you're still under the impression that ObamaCare is a succeeds just because more people are "covered," you're just not understanding the real economic picture here.

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Dan Calabrese——

Dan Calabrese’s column is distributed by HermanCain.com, which can be found at HermanCain

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