Health Insurers’ Consensus on Obamacare Is Collapsing

The health insurance industry is undergoing a crisis of consensus on how to respond to the failure of Obamacare. That is the only way to interpret the departure of another large, national carrier, Aetna, from America’s Health Insurance Plans (AHIP). This follows UnitedHealth Group’s departure from the industry’s trade group last June:

Those misgivings manifested most recently during the debate over ObamaCare when the so-called “big five”—qqqUnitedHealthcare, Anthem, Aetna, Humana and Cigna—qqqformed their own informal coalition.

Another healthcare executive, who asked for anonymity in order to speak freely, said that, for some, “there’s a sense that AHIP has become a one-trick pony for the Obama administration,” referring to the goal of advancing ObamaCare.

With the country’s first- and third-largest health insurers gone from its ranks, the insurance group could see problems arise from the divisions between large and small companies.

(Peter Sullivan & Megan R. Wilson, “Aetna departure a major blow for insurers group,” The Hill, January 5, 2016).

Insurers are losing money in Obamacare’s exchanges. The Republican-majority Congress has refused to bail them out of their Obamacare losses. On the other hand, they clearly have influence in the Congress, because last December a bipartisan majority gave the industry one-year relief from its Obamacare excise tax (which is passed on to consumers and employers anyway).

Congress has just passed a partial repeal of Obamacare, which will be vetoed by the President. How seriously we should take this gesture is to be determined by future events, especially if a Republican president is elected who would sign the bill.

Given these circumstances, it is not surprising the health insurers are in disarray: Will some dig their heels in to defend Obamacare while others finally accept that it needs to be repealed and replaced? How this powerful lobbying force divides will be critical in determining the future of health reform.

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For the pivotal alternative to Obamacare, please see Independent Institute’s book, A Better Choice: Healthcare Solutions for America, by John C. Goodman.