You may have heard the term “death spiral” used to refer to Obamacare, but it’s not often defined.
2 million more people just dropped out of ObamaCare. It is in a death spiral. Obstructionist Democrats gave up, have no answer = resist!
— Donald J. Trump (@realDonaldTrump) June 13, 2017
A death spiral occurs when there’s an influx of sick people enrolling in insurance (which is required because Obamacare doesn’t allow insurance companies to discriminate against those with pre-existing conditions), causing price hikes across the board to cover the costs of the increasingly sick population…. which then prices some healthier people out of the insurance risk pool, and the cycle continues.
Back in February, the CEO of health insurance company Aetna confirmed that Obamacare has led our insurance system into a death spiral. In his case, 1 percent of customers were accounting for fifty percent of his companies’ expenditures.
The interviewer from the Wall Street Journal in the clip above said it certainly sounded like Aetna would be withdrawing from Obamacare, and now it’s confirmed.
Health insurer Aetna announced Thursday that it would completely withdraw from the Obamacare exchanges in 2018, after seeing its profits soar from reducing its participation this year.
The company said during an earnings call that it was withdrawing from the exchange in Nevada, the last state it had considered staying in. Aetna was leaving the possibility open because it was applying for a Medicaid managed care contract, and the state gives extra consideration to insurers that participate in both programs.
During its second-quarter earnings call on Thursday, however, Aetna said it was not moving forward with the recently awarded contract and would be leaving the exchange as well.
“Our 2018 participation was required based on a Medicaid contract with the state,” spokesman T.J. Crawford said in an email. “As a result of terminating that contract for unrelated reasons, we will not have a presence on the individual exchange in Nevada.”
Aetna notified state officials about its intent to no longer participate in the Medicaid managed care program in a letter sent July 1, citing low enrollment.
“This is far less than the critical number needed to ensure a viable Medicaid plan capable of delivering quality care and competitive programs,” the chief executive officer of the program wrote, citing an enrollment figure of 1,600.
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According to Aetna, they lost $700 million from Obamacare from 2014-2016, and will lose an additional $200 million in 2017 despite having had reduced their operations to only four states.
Clearly, Obamacare has failed in its goal to reduce healthcare costs. Despite the sensationalist figures that millions will “lose” coverage in absence of Obamacare, most only have health insurance in name only thanks to the astronomically high (and rising) deductibles…
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