Wednesday, August 17, 2016

Aetna's pullout does raise a real problem

About Aetna pulling out of the ACA exchanges:
To Obamacare critics, Aetna’s retreat is proof the law is failing. To supporters, it shows the company was using its participation in Obama’s signature domestic policy initiative as a bargaining chip in order to secure approval of a controversial business deal.
Actually, either way it shows a pretty serious flaw in Obamacare. If the system lets health insurance companies use access to coverage as a bargaining chip to convince the federal government to look the other way on an anti-trust issue, that is a problem. Our health care system should not be subject to that kind of manipulation.

ADDING: The fact that Aetna is pulling out of PA, where it has made a nice profit which conventional wisdom (wrongly) characterizes as a swing state in the presidential election, really supports the theory that Aetna is trying to use the ACA to squeeze the Obama administration into approving its merger. As I said above, that is not an argument in support of Obamacare. While the pullout does not necessarily show that the law is failing as conservatives insist, it does show that with so few players in each exchange, the law gives insurance companies extra leverage to get the fed to bend the rules in their favor. That would be a major flaw with the health care law. The flaw could probably be fixed through legislative action. But the current Congress is not interested in any constructive fixes to this law. They want it to be flawed.