[guest post by JVW]
As a follow-up to Patterico’s post earlier today regarding Aetna’s decision to drastically cut back on their participation in ObamaCare state exchanges, the hopelessly dumb New York Times editorial board types out a typically mindless editorial assuring the Obama Administration’s fan club that this is but a “hiccup” in the irreversible and ongoing establishment of a permanent role for the federal government in administering health care:
[S]ome big national insurers like UnitedHealth, Humana and now Aetna say they are losing too much money on marketplace policies. The reason is that the customers they signed up used more medical services than the insurers had anticipated. On Monday, Aetna said it would reduce the number of counties where it sells such policies to 242, from 778, citing a $200 million pretax loss on those policies in the second quarter. The company had sold marketplace policies to about 911,000 customers as of April.
Losing money will focus your mind in that way, won’t it? The editorial goes on:
There have been questions about Aetna’s motives. Senator Elizabeth Warren, Democrat of Massachusetts, said the insurer could be pressuring the Justice Department to drop or settle a lawsuit it filed last month to block Aetna’s proposed $37 billion acquisition of Humana. She and others have pointed out that as recently as April, Aetna’s chairman and chief executive, Mark Bertolini, told analysts that he considered the company’s presence in the marketplaces “a good investment.” And in May, Aetna said that it might expand into other parts of the country. Aetna says that the lawsuit did not influence its decision to reduce participation.
So an administration with a propensity for exaggerated happy-talk and playing hardball politics is upset that Aetna might be engaging in exaggerated happy-talk and playing hardball politics? Shocking. The conclusion from the NYT:
It is clear, however, that Congress should strengthen the marketplaces to ensure sufficient competition. For example, it could encourage more healthy people to buy insurance by extending tax credits to families that now earn too much to qualify. Many of those people find it cheaper to pay the tax penalty for not having insurance than to buy it. If more healthy people participated, more insurers would want to be on the exchanges. Congress and state governments could also consider offering a government insurance plan in rural areas and other places where there is little or no competition, as President Obama and Hillary Clinton have proposed.
The Affordable Care Act was passed allegedly to address three huge challenges: (1) millions of Americans lacked health insurance, (2) premiums were rapidly rising far beyond inflation and increases in wages, and (3) health care costs (Medicare and Medicaid especially) were eating up a larger and larger share of the federal budget. Today we know that despite the full implementation of the trillion-dollar ACA: (1) 33 million Americans still lack health insurance coverage, (2) premium increases still vastly outstrip economic growth, and (3) health care spending as a percentage of GDP continues to rise.* According to the NYT editorial board — the supposed cream of American journalism — the answer is for the government to throw even more money into the system by subsidizing the healthy young people whose premium payments we were promised would subsidize the otherwise uninsurable who need to consume more expensive health services. It’s like borrowing money at 8% to pay off your credit card balance which is growing at 7%, but far be it for the New York Times to figure that out.
The editorial concludes by pompously telling us that “Any law as complex and comprehensive as the Affordable Care Act is bound to have some hiccups. The only sensible response to those problems is to improve the law.” Because Heaven forbid any government spending program ever be subject to scrutiny and sensibly discontinued due to a failure to meet its objectives.
* According to the downloadable spreadsheet at the link, health care spending as a percentage of GDP has risen as follows: 1960 – 5.0%, 1970 – 6.9%, 1980 – 8.9%, 1990 – 12.1%, 2000 – 13.3%, 2005 – 15.5%, 2010 – 17.3%, 2014 – 17.5%. Unsurprisingly, the promised “savings” from ObamaCare have failed to materialize.