On Tuesday Aetna Insurance announced that in 2017 it would not participate in the health care exchanges in 11 of the 15 states that it had in 2016. At first glance it was perceived as a big blow to Obamacare. It was certainly portrayed as such and as evidence of the unraveling of Obamacare in the right wing echo chamber. Things are not always what they appear to be on the surface. This situation demands a deeper dive. Let’s do it together.
In April of this year Aetna CEO Mark Bertolini called his company’s involvement in the exchanges, “A good investment.” By any business measure it certainly was. Businesses spend money to acquire new customers. It doesn’t matter if you are selling insurance or hot dogs. Of political necessity and in response to the insurance industry’s lobbying clout Obamacare was designed to utilize private for-profit insurers like Aetna. I’m far from an expert on the insurance industry but I believe it is common practice to pay a greater commission rate on new business than renewals; such is the premium on garnering new customers. However my degree is in management and the root goal of every company is to grow. In the services industries the two primary ways to grow are to obtain new customers and to cross sell additional services to existing customers.
Aetna had come to a merger/acquisition agreement with Humana pending Justice Department (DOJ) approval. On July 5, 2016 Bertolini wrote the DOJ a letter that in part read: “Specifically, if the DOJ sues to enjoin the transaction, we will immediately take action to reduce our 2017 exchange footprint.” To me that certainly sounds like the threat of a bully at best, an economic domestic terrorist at worse.
On July 21, 2016 DOJ made its opposition to this deal and another similar one public. You decide whether there was cause and effect in this matter. I know what I think. The motivation had nothing to do with the long term profitability of exchange participation and everything to do with Bertolini and friends not getting their way!
I am proud of the Obama administration standing up for what they felt was in the best interest of Americans! Giving in to terrorists whether domestic or foreign, economic or otherwise is never a good idea in the long run!
As I have long and consistently contended Obamacare is far from perfect and in need of adjustments. If the Republicans in Congress were serving their constituents instead of being focused on sabotaging anything that Obama proposes some of the flaws would have already been addressed. If the Republicans in red state capitals had served their constituents by accepting Medicaid expansion instead of being controlled by their most radical right supporters the private insurers would have already had a healthier pool of new clients to insure.
I know I’m more liberal than most but I still feel the eventual solution is universal, single payer, portable health care for all from cradle to grave. Obamacare is a great start but it has a long way to go. I liken it to Social Security when first enacted in 1935; today it is a much more encompassing and better program. (The Republicans are still fighting it.) The eventual answer for so many reasons is a form of socialized medicine. Greedy moves like Aetna’s may only hasten that day.
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