Big Insurers Scared Of Obamacare

Big insurance companies, such as Aetna and UnitedHealthcare, are backing out of Obamacare insurance exchanges out of fear of chronically ill subscribers.

The Affordable Care Act, known to many as Obamacare, is scaring people for all the wrong reasons.  It is also scaring big corporate interests into fighting against it because, you know, reasons.  But the group most afraid of the Affordable Care Act happens to be the one with the greatest connection to it:  Big insurance corporations.  In what will likely cause even more disruption in the early days of Obamacare's enactment, big insurance companies such as Aetna and Cigna are staying away from state insurance exchanges for the time being.  The reason?  They are afraid of taking on subscribers with pre-existing conditions.

One of the Affordable Care Act's largest victories was banning the pre-existing condition rule from insurance policies.  This rule meant that an insurer could deny insurance to a person with a history of illness, be it cancer or a chronic heart condition or AIDS.  Aetna and Cigna's reasoning behind denying insurance to those with prior conditions was to keep costs down, out of fear that a subscriber or group of subscribers would rack up massive hospital bills, forcing costs for everyone else to go up.  While certainly reasonable when applying market and capitalist principles into this, it only creates a vicious cycle for patients with that history of illness: Without getting proper treatment, which they cannot get because they need insurance to afford it, their condition becomes worse, and their treatment options become more expensive, and they deteriorate even more.

The ban on pre-existing conditions invoked by the Affordable Care Act meant that a variety of changes had to be put into place to ensure costs were kept down.  These changes included insurance exchanges where insurance policies partly paid for by the government could be bought, and the requirement that everyone has to buy insurance.  However, despite these changes, Aetna, Cigna, and UnitedHealthcare are initially staying out of the insurance exchanges out of worry that their previous policy will come back to haunt them, in the form of the exchanges being flooded by those patients they previously denied coverage.

Of course, by doing this, Aetna and Cigna may in fact have their fears justified by limiting the pool of actual policies available to subscribers through the insurance exchanges.  By staying out and limiting the pool, other insurers have to be burdened by a greater number of these patients they are so worried about.  Thus, costs go up as predicted, and at the end of next year, the big insurers will be able to say "I told you so!"  It remains to be seen if that will be the case, though the negligent and hostile attitude towards implementing the Affordable Care Act, this remains a very real possibility.

Of course, a bigger problem with the Affordable Care Act is the lack of cost controls around medical procedures themselves, which is primarily the reason health care costs are so high to begin with.  This will eventually have to be addressed if affordable health care is to be made possible.  Also, there is no dental plan in Obamacare.  And Lisa needs braces.

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