Hey, if you've been paying attention to the Health Care debate, you may have heard more than one Republican mention that the need for immediate repeal and replacement is imminent - that all insurance companies are in a death spiral from participating in our current system. Well, we at The Policy Geek think that's a bunch of bunk. In an effort to weed through the misinformation, we repost here a piece by our good friend and writer Dr. Bear originally posted on Mad Mike's America. Enjoy!
Republicans are fond of discussing how Aetna Insurance Company’s withdrawal from exchanges is evidence that the Affordable Care Act of 2010 is “such a disaster,” or worse, how “Obamacare is in a death spiral.” This supposed “death spiral,” according to the current speaker, is the reason the Republican party is in the process of quickly repealing the law, and now trying to jam through the House and Senate their “replacement.”
Let’s not forget how it was Republicans who complained how the last bill was jammed through without giving the public a chance to review it, despite it taking over eighteen months to debate. However, what Republicans – like Speaker Ryan – tend to neglect telling the American people is precisely “why” Aetna withdrew from the exchanges, and understanding the why is just as tantamount to understanding the motivations behind the Republican party’s persistent failure to disclose the reason.
Interestingly, Aetna Insurance’s CEO is repeating the exact same story, that is, “ObamaCare is in a death spiral.” According to Bertolini who made his remarks back in February at the Wall Street Journal’s the Future of Health Care event, the insurance company’s Chief Executive believes the risk pool is deteriorating, the funding mechanism is awash, and the 'premium model' are all reasons for the supposed failure. However, according to PolitiFact, the Affordable Care Act is not in any “death spiral,” and they have rated both Ryan’s claim – and one can extrapolate also Bertolini’s statement - as false.
In fact, PolitiFact Wisconsin goes out of their way to explain precisely why this is not the case; more people have gained coverage under the law, fewer people in this nation are uninsured with a mere – but significant amount – 8.9% of Americans still not having insurance. The fact-checking organization proceeds to explain exactly how this has been accomplished. Key to those factors are the ability of children to remain on their parent’s insurance plan until they reach the age of twenty-six, and insurance companies are now mandated to no longer discriminate against those who have pre-existing conditions. It is noteworthy to point out that PolitiFact also admits that the law has not been popular and that several promises have not come to fruition. Instead of the elimination of deductibles, in some cases there has been an increase in deductibles, and so that part of the ACA missive was rated previously as a “broken promise.”
What the fact-checking organization did not provide however, is what reasons exist for those deductibles to be increasing versus decreasing as was the original plan. Was this problem really due to the individual mandate which just so happens to be the least popular part of the law? First of all, under ACA as it stands now the insurance companies are allowed to charge three times (the maximum amount allowed) of what they would originally charge as a means of mitigating for what they perceived as a pitfall - the losses incurred by insuring more sick people - despite the fact that before the ACA many healthy individuals were not signing up for coverage. Well, apparently, if you tell an insurance company that they are able to charge three times the amount of their original costs – and do so under the auspices of allowing them to do so after they get a better look at their risk pool – one can nearly be assured the insurance companies – out of greed – will take advantage of the established maximum allowed by law. And before one blames the former President for this aspect of the law, one need remember that prior to the implementation of the law, insurance companies had no cap whatsoever, that is, they could charge whatever it was they wished, all under the auspices of capitalism and free trade.
Yes, the ACA as it stands now is far from perfect, but at least it has several benefits to it while remaining a starting point which legislators can actually build upon. Did you know the currently proposed plan by the Republican Party would allow insurance companies to charge up to five times the amount they would have normally charged - all under the auspices of getting a glance at their risk pool - legally allowing them to sharply increase their rates, supposedly in accordance to the perceived changes in risk? However, how many of you believe the CEOs of these insurance companies are not taking advantage of consistently charging the maximum amount allowed by law?
In addition, the fact-checking organization Politifact doesn't seem to take into account how many people are simply against the word 'mandate' – originally a Republican idea promoted by the conservative think-tank “Heritage Foundation” – and so are refusing to purchase into the ACA, readily accepting the penalty for not doing so. Some corporations are doing so out of a supposed “religious conviction,” like Hobby Lobby, due to the law's provision allowing women to purchase contraceptives with their insurance coverage, while others accept the penalty over getting insured due to their faulty notion that should they participate they would be violating their “moral conscience.” Never mind that these same folks have no issue whatsoever paying for taxes which support their public schools, or annually purchasing automotive coverage in accordance with their State, because in their minds this is socialism par excellence. Make no mistake that these same folks have no issue whatsoever with Medicare, Social Security, and other programs which benefit THEM, but this is just Obamacare mandate is a bridge too far.
Any person following politics closely realizes this has been the Republican strategy since the Tea Party took over in 2010, disassemble as many government programs as possible, and honestly one can make an argument that it has been a staple for many years now. After all, who can ever forget Ronald Reagan’s blatant lie about the “Welfare Queen?” It does seem that Republicans have become more fond of this strategy in recent years due to their stepping up their efforts, doubling down on their projects to defund one successful and popular safety net institution after another. Remember the allegation and accompanying sound bite played across conservative media purporting that the former President told business owners that “they didn’t build their business?” Or, how about the oft repeated charge that when former Secretary of State Clinton testified to the investigatory committee on Benghazi that she said, “What difference does it make?” In every one of these examples, the entire story was not shared with the viewing or listening audience, providing a mere sound bite that satisfied the ideological preference of conservatives. But democracy cannot function properly when the very people who send people to Washington do not have accurate information, can they? Which leads us right back to Aetna’s and Paul Ryan’s claim that “Obamacare is in a death spiral,” because this is not the rest of the story as Paul Harvey used to say.
So what is the rest of this story? To know that, you first have to know the part were Aetna's CEO shared how Humana Insurance Company and Aetna had a proposed merger. The problem was the Justice Department back in 2016 was filing suit against Aetna because according to Reuters, the merger would have been a violation of our antitrust laws. Interestingly, Humana was not the only insurer that Aetna had its eyes on, as there was also an attempt by Aetna to merge with Cigna. According to the federal government – rightfully – these mergers would have restricted competition in the marketplace, so the proposed mergers necessarily were being reviewed.
So how did Aetna respond to the looming lawsuit? Simply put, they threatened the federal government by telling them they would pull out of the exchanges they were participating in - and those they had planned to expand into - if the federal government did not drop the lawsuit. And then when they proposed deals were shut down, they screamed "death spiral." However, this is not what the corporation has been telling Americans now, is it? No! They said the reason they were pulling out was due to the hardship and loss of business and cost issues, hardly true, and when one looks at the matter objectively, one readily sees that Aetna tried to “extort” the federal government. In fact, according to the Los Angeles Times, a United States District Judge ruled in open court that, “Aetna tried to leverage its participation in the exchanges for favorable treatment from the Department of Justice regarding the proposed merger.” So it is a matter of public record what Aetna's real motive for pulling out of the exchanges really was....revenge.
THIS is why Paul Ryan, Aetna’s CEO, conservative lawmakers, and the conservative media entertainment complex should NOT be telling Americans that Aetna is an example of how “Obamacare is in a death spiral.” It simply is not true, and it misleads the American people which - while it fits their ideological narrative - does NOT fit the facts. We thought you should you know The Rest of The Story.
Trump, while running for office, stated how he would be certain to provide insurance to everyone, how important it was that no one be left behind, that it was the least we could do, and now the Republican party has crafted legislation which already is predicted to leave the poorest and the oldest of us behind with no insurance, all the while providing CEOs and the wealthiest a mighty tax break. In fact, under Ryan's Trumpcare plan, if you let your insurance lapse for more than two months, you'll be subject to a 30% spike on your insurance premiums payable directly to your insurance company. Older people, the poor, and the sick alike will pay dearly should this bill become law, and again, the Affordable Care Act is far from being in a death spiral. But don’t tell that to the Republican Party! They're on a mission.
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