Major Insurers Exit Obamacare Marketplace, Brings Topic Back In Election Spotlight

By  //  August 20, 2016

With rising premiums and increasingly limited choice, is obamacare collapsing?

ABOVE VIDEO: FOX News’ America’s Newsroom reports on the fundamental flaws plaguing Obamacare and the reasons that insurers are scrambling to deal with major losses by exiting the marketplace insurance exchanges.

Although many conservative candidates haven’t been beating the repeal and replace drum as loudly this election cycle, Aetna’s decision to withdraw from a majority of Affordable Care Act (ACA, aka Obamacare) exchanges and Humana and United Health exiting Obamacare markets in 2017 brings the topic back into the election spotlight.

ACA Money Loser For Most Insurers

While mounting a strong challenge for the Democratic presidential nomination, Sen. Bernie Sanders contended that the ACA was flawed in part because of the “huge profits” realized by the participating insurance companies. However, it now appears that none of these companies are making huge profits, at least not on the ACA segment of their business.

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Aetna’s decision to withdraw from a majority of Obamacare exchanges, and Humana and United Health exiting Obamacare markets in 2017 brings the topic of repealing and replacing the healthcare law back into the election spotlight.

Bloomberg News reported that the four largest health insurers in the U.S. have posted hundreds of millions of dollars in losses on their ACA exchange businesses. Data show UnitedHealth is predicting a loss of $850 million this year, while Aetna, Anthem, and Humana are each expected to lose about $300 million, and as a result of these losses, the insurers are exiting ACA marketplaces.

Sanders says that major health insurers pulling back their participation in Obamacare exchanges affirms the need for Obamacare replacement, but his solution has always been a single-payer, government-run program.

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Trump: ACA Creates Less Competition and Fewer Consumer Choices

However, Democratic presidential nominee Hillary Clinton says that she plans to “build on the progress we’ve made (with the ACA),” and Republican nominee Donald Trump calls for repeal and replacement of Obamacare with a system that would bring “much-needed free market reforms to the healthcare industry.”

Insurers staying in the ACA market are making a strong case for premium increases, pointing to a pool of enrollees that is smaller, sicker and costlier than they expected.
Insurers staying in the ACA market are making a strong case for premium increases, pointing to a pool of enrollees that is smaller, sicker and costlier than they expected.

Trump bases his approach to healthcare on his belief that Obamacare includes incentives which encourage insurers to misprice risk, selling mispriced healthcare coverage, which results in runaway costs, increasingly high premiums over time, and ultimately an unsustainable business model.

Insurers staying in the ACA market are making a strong case for premium increases, pointing to a pool of enrollees that is smaller, sicker and costlier than they expected. Trump also asserts that the ACA creates an environment of less competition and fewer consumer choices.

With this latest in a string of defections from ACA marketplaces by big insurers, customer choice will be limited in many markets.

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Aetna’s Exit Leaves Floridians With Fewer Obamacare Options

Aetna is ending its Obamacare plans in 11 states. Florida is one of the states hit hardest by Aetna’s exit from the ACA marketplace, leaving Floridians with fewer choices and ever increasing premium rates.

Eleven companies have requested to sell insurance in Florida on the federal exchanges in 2017, down from 19 insurers in 2016. According to Florida’s Office of Insurance Regulation, the average premium rate increase is projected to be nearly 18 percent,

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Aetna’s and United Health Care’s exit from Florida’s ACA marketplace will leave 44 of Florida’s 67 counties with just one provider on the exchange for the 2017 enrollment year.

Aetna’s exit from many Obamacare marketplaces follows a similar announcement in May by United Health Care, whose exit, according to an analysis by Kaiser Health News, will leave 44 of Florida’s 67 counties with just one provider on the exchange. Florida Blue, is the only insurer that offers plans in every Florida county, and a company spokeswoman said the insurer has no plans of cutting back.

Four healthcare insurers will be offering ACA marketplace policies in Brevard County next year. Obamacare enrollment starts Nov. 1 and ends on January 31, 2017.

Mounting ACA ‘Fails’ Injecting New Life Into ‘Repeal and Replace’ Movement

With the ACA’s fourth enrollment season starting in the fall, opponents of the law who have been projecting its failure are being handed considerable ammunition in their quest for “repeal and replace.”

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The success or failure of the ACA will be a hotly contested topic among all candidates in November.

New failures are piling up among the member-run ACA health insurance co-ops, which represent one of Obamacare’s most idealistic goals, leaving only 7 of the original 23 in place for 2017.

Adding that to the withdrawal from ACA marketplaces of several major insurers triggering an overall negative impact on choice and premium price leaves the never particularly popular ACA very vulnerable and a campaign point of contention over the next 3 months.

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Although many conservative candidates haven’t been beating the repeal and replace drum as loudly this election cycle, Aetna’s decision to withdraw from a majority of Affordable Care Act (ACA, aka Obamacare) exchanges and Humana and United Health exiting Obamacare markets in 2017 brings the topic back into the election spotlight.