Aetna’s Short Sighted Move
What is Aetna thinking in announcing it was withdrawing from 11 Affordable Care Act “exchanges”? It is mind blowing to think that their explanation (costs are exceeding revenues which is most likely true) is the real reason. Could it be a bluff to get the US Government to up the “exchange premiums” so that Aetna can report better earnings? Could it be that Aetna is hopeful that the next Administration will allow healthcare insurance providers to return to the good old days when they could reject enrollees for “pre-existing conditions” (when Aetna did report higher earnings)? Who knows but Aetna’s withdrawal signifies exactly what is wrong with US healthcare.
Healthcare is a business which is transacted on businessman’s terms.
In most other modern industrial countries, affordable and dignified access to healthcare is a basic expectation. In these lands such as Germany, France, Canada, and Japan (to name a few), healthcare is a right. Why is it not here?
There are companies like Aetna in these other countries. These “insurance” companies, however, provide an “administrators” role processing paper work after the fact. These countries have a “single” payer, their government. Rates are set by national, non-political boards of medical experts. While rates for doctors, hospitals, medical devices, and drug companies are negotiated, the government has the last say. Under this model, the insurance company’s profit is modest and in line with the services they provide.
Healthcare is not free anywhere, and must be paid for in some way. The method of choice for those superior healthcare systems has been a national value added tax (like a sales tax) where everyone pays according to what one consumes. There is no free lunch.
In the US, out of sight is out of mind. The fact that poorer Americans go without preventive healthcare seems unimportant. The idea that less well off Americans could buy basic coverage, often with additional government assistance has been resisted by Obamacare opponents.
What about fairness? Fairness (I pay for mine, others should pay for theirs) is often given as justification. In truth, very few Americans purchase healthcare directly from money out of pocket. Most Americans obtain healthcare insurance as part of their employment. As a consequence many Americans act as it healthcare is a free lunch.
“Exchange business makes up a fraction of Aetna’s overall business and does not represent the difference between solvency and loss for the whole business. So why the withdrawal from Obamacare exchanges?
Oh, could it be the Government’s objection to Aetna and Humana proposed merger?
Aetna CEO Mark Bertolini, according to news reports has told the government that if the government opposed the merger, Aetna would withdraw from the exchanges. Hmmm.
This hard ball approach demonstrates the business aspect of healthcare delivery, not the delivery of basic healthcare services. One would think that should disqualify Aetna from participating in any aspect of healthcare services. Aetna, of course, should be free to offer other types of insurance, like life, home, and auto insurance but not healthcare.
Of course, there is no basis in law for this recommendation. And Aetna knows that.
The gamble Aetna’s is making is that our elected representatives will not consider taking action to reverse Aetna’s decision. Even more disappointing, authorities will not scrap the Affordable Care Act and adopt a well funded “universal” healthcare system.
Sadly, Aetna may be making a good bet.