posted at 4:01 pm on September 8, 2016 by John Sexton
Let the show trials begin! Socialist Bernie Sanders, socialist Elizabeth Warren and three other senators are demanding answers about the decision by Aetna to pull out of the Obamacare exchange. The five senators sent a letter (h/t: HuffPost) Thursday to Aetna CEO Mark Bertolini. It reads in part:
We are writing with regard to Aetna’s August 2016 announcement that the company will withdraw from Affordable Care Act (ACA) public exchanges in 11 of the 15 states in which it currently operates. Over 11 million individuals and families across the country receive health coverage through plans sold on ACA exchanges. We are particularly troubled that Aetna’s decision to leave the ACA exchanges appears to have been motivated by the Justice Department’s decision to challenge Aetna’s proposed $37 billion merger with Humana—a deal that the Justice Department and many experts predicted would harm competition in the health insurance market and negatively impact the cost and quality of health care.
In an April 2016 call with investors, you said that Aetna’s exchange business was a “good investment,” adding that the company was dedicated to “working constructively with the administration and lawmakers” to ensure the long-term future of the program.14 Aetna executives also explained that the demographics of the company’s new on-exchange membership “look[ed] very similar” to its previous membership, and that it was seeing growth primarily in markets where Aetna had “a very good cost structure,” including Florida, Georgia, and North Carolina.15 The following month, Aetna spokesman T.J. Crawford said that Aetna planned to continue selling plans on the ACA exchanges in all 15 states where it currently operated, and noted that it might expand its exchange business into additional states in 2017.16 In none of these statements did Aetna indicate that its continued participation in the exchanges was contingent upon federal government approval of its merger with Humana.
But as the Justice Department began to raise questions about the merger, Aetna changed its tune.
The letter ends with questions the senators demand Aetna answer by next week. The point of the letter seems to be to rile up public sentiment against a company that gave progressives chills when it announced it was withdrawing from most of its exchange business last month.
Browbeating Aetna sends a clear signal to other insurers: Dropping out of the money losing exchanges will be met with public scolding and possibly torches and pitchforks. A spokesperson for Aetna gave a statement to Business Insider highlighting the real underlying problem which Warren’s letter seems designed to avoid, i.e. “The ACA is not sustainable…”:
We are one of many insurers, large and small, that has been forced to reduce its public exchange participation due to an increasingly unstable marketplace. This isn’t a recent development, as more than 40 companies exited certain geographies for the 2016 plan year.
Singling Aetna out may be politically convenient during election season, but this letter ignores realities and takes the focus away from needed reforms. The ACA is not sustainable without bipartisan action that improves access, affordability and quality of care for consumers.
The reality here is that Obamacare has always been a negotiations between the government and insurers. The basic bargain reached years ago was that insurers would support a system in which no one could be refused a policy if government would create a system in which everyone was forced to buy one. There have been many more negotiations along the way. So the idea that Aetna has somehow violated some deep principle by still behaving as if this is a negotiation is pretty silly.
Warren’s letter makes a big deal about how predictable it was that the government would turn against the merger. Here’s what else was entirely predictable: Insurers would say whatever the government wanted to hear about Obamacare so long as the merger was on the line.
The progressive left was happy to take all of the insurance industry’s happy talk at face value. Plenty of progressive policy wonks pointed to those insurer statements praising Obamacare as a sign the program had a bright future. Not a single one of them pointed out the fact that the insurers had an (obvious) ulterior motive to say those things at the time.
But now that the insurers have dumped Obamacare, progressives are pretending it all comes as a shock. Why are insurers suddenly not willing to continue losing millions with a smile about the future? Because it was always a lie! They never liked losing money on this hot mess of a program. And now that government has scuttled their mergers they have no more incentive not to say so.