
Aetna CEO Threatened Obamacare Pullout If Feds Opposed Humana Merger - helloworld
http://www.huffingtonpost.com/entry/aetna-obamacare-pullout-humana-merger_us_57b3d747e4b04ff883996a13
======
seibelj
Can anyone succinctly explain the benefits of having a market for private
health insurance companies, rather than a single provider of health insurance
(government, aka "public option")? Can a capitalist case be made for their
existence? Does the lack of a large private insurance market in countries with
government-provided health insurance cause lots of inefficiencies and waste?

~~~
Randgalt
The purpose of government is not to require the most efficient option.
Government isn't capable of it anyway. Government is force - nothing more. The
purpose of government is to protect our rights. "Single payer" (a euphemism
for socialized medicine) by definition violates rights by forcing people to do
things against their will. For example, in Canada (until recently) people were
prohibited from using private health care even if they want to.

The health systems in Europe are not radically different from the US system.
The efficiencies of each are difficult to quantify without context. For
example, the US invents most of the drugs and medical technology used by the
world. Would this still happen if there was more invasive regulation? We can't
know.

Besides all of this, think of every other area of the market where the
government insinuates itself. Are public schools better than private schools?
Almost never. Is the US postal system better than FedEx? Of course not. The
government is not a commercial entity. The incentives and influences on it are
not conducive to producing quality products at good prices.

~~~
loteck
_For example, in Canada (until recently)_

Until recently. This means that all people can obtain health care regardless
of their ability to pay, and that the system is flexible enough to continue to
experiment with the ideal implementation.

 _Are public schools better than private schools?_

Public schools are exactly 100% better than private schools for students who
can't afford to attend private schools.

 _Is the US postal system better than FedEx?_

They are if you want to get a letter delivered anywhere in the world cheaply.

You have made a lot of good arguments for socializing care here.

~~~
Randgalt
1\. Try getting an MRI in Canada. Canada rations care via wait lists.

2\. Your argument implies that there wouldn't be low cost schools in the
absence of public schools. The evidence is overwhelming that the opposite is
true.

3\. I live in Panama. When I need something mailed here I use FedEx or DHL.
The USPS is unreliable and takes far too long. If there weren't laws against
private first class mail in the US they'd be undercut in that market as well.

~~~
parasubvert
Canadian here.

Firstly, diagnostic care is often privately managed throughout the provinces,
so if you don't want to wait, you can often pay to expedite. It's about $900
for a joint MRI.

Secondly, if you really need an MRI for a critical diagnosis, as I once did in
2012 as a hospital inpatient, I got it within 2 days.

Canada's health system is a point of national pride.

~~~
Randgalt
It depends where you live. I know many Canadians who've had different
experiences. This points to a major problem with socialized products - how
they perform depend not on merit or ability to pay, but where you live, how
good your representative is, etc. That is much worse.

~~~
parasubvert
I really don't agree. I've lived in three Canadian provinces, and four U.S.
states, from towns of 1000 people, small cities of 10k, medium cities of 100k,
to large cities of 1m+.

Having lived through the Ontario cuts in health care in the 90s ("the Harris
common sense revolution"), I don't really think political reps Federally or
Provincially had any say on quality of care or what hospitals we got, it was
all redesigned top down (not all that different from an HMO really, in my
experience). Did care access and waits times suffer at the time? Yes. Still
wouldn't trade it for a private system.

The difference in access and amount of supply between a rural market and a
city in Canada is not too different than in the US. There's a lot of land mass
to cover in either country if you're not in a major population centre.

The Canadian system blows away the US system by an order of magnitude, IMO, in
terms of what really matters - access and outcomes. Obamacare made the US a
bit better, but that's not a tall order.

~~~
Randgalt
What's the worst condition (if you don't mind saying) you've had where you had
to use the Canadian system? Generally, socialized medicine works fine for
routine care but badly for catastrophic (i.e. expensive) care.

~~~
parasubvert
I don't mind saying.

\- Severe pneumonia (1 day in emerg, 9 days in ICU followed by 8 in an
inpatient ward)

\- Total pericariectomy (2 days in postop ICU, 3 days in ward)

Among other stays/issues prior to these.

The latter surgery was the culmination of outpatient medical care over 3 years
with multiple specialists (cardiologist, internist, and cardiac surgeon),
along with multiple CT, MRI, cardiac catheterization, countless blood tests,
many of which were sent to Winnipeg (the equivalent of the CDC) for rare
disease scanning, and over a dozen echocardiograms ... none of which I had to
wait for longer than a day or two ... And none of which I had to pay for (just
my medication through private insurance). In fairness the surgery itself
wasn't critical, so I waited 6 months. They were willing to expedite if my
condition deteriorated (it didn't). And after regular cardiologist visits ,
after I was stable, it could take 8-10 months. If I had an issue they'd
expedite me in though.

I am not saying the Canadian system is ideal. Just that it is a reasonably
functioning system.

There are some cases where it is both very frustrating and inspiring. I have a
dear friend who has a child with a congenital heart defect due to an extremely
rare genetic connective issue disorder that is similar (but different) to
Marfan syndrome. The Canadian system has been fantastic to senior levels of
provincial administration in managing this case, involving international
hospitals, breeding zebrafish to replicate the specific mutation, working to
manage the treatment of this complex child who is close to turning 5 but
likely would have died in the first few weeks after birth in another era.

Keeping this child alive (he is in and out of the hospital about 50%) has
easily cost a tremendous amount of public money, but the insurance system risk
pool is designed to handle these sorts of outlier cases to ensure future cases
can benefit and that this child can have (mostly) a good life in between and
during hospital stays. This child gets world class care and has been kept
alive due to the system mostly working.

That's the good part. The bad part is that managing complex care in general is
a mess as in many health systems, making it a full time job for at least one
parent to juggle the various specialists, appointments, tests, medications,
history, etc... Which is difficult if you're a single parent. It's almost
easier to go on welfare than to work if you are a parent to a critically ill
child. So you can get nursing staff to help at home but it's debatable what is
covered and what is not, medical expense deductions have some arcane regs like
you can't expense a trip under 40km, yet this child has on average 280 trips
to the hospital or a clinic a year... Adding up to a lot of expense. Some
things like specialized child formula weren't covered by health insurance
either until recently (which can cost upwards of $1400 monthly, really sucks
when your child can't eat anything due to esophageal issues and has a G-tube
and needs this formula to stay alive..)

So, not ideal... But Is this all socialized medicine ills? Sort of I guess? I
can see the same problems in a private system.

------
dieselz
Before the pitchforks come out, keep this in mind: before Obamacare increased
access to affordable individual plans, employers were the typical purchasers
of health care plans. When you have a 100+ person company, the company pays a
rate that averages out their employee pool's healthcare needs. Now we have a
situation where more people can more efficiently participate in the healthcare
market. Individuals who are young and healthy will opt for a lower cost plan,
and those who already have illnesses or higher risk for illness will spend
more for their healthcare. This efficiency on the consumer side is destroying
revenue for the healthcare companies.

I am _not_ saying that anything was even close to perfect before, but we're
seeing the private sector responding to Obamacare - it's not profitable enough
or even sustainable in some cases. Now the government wants to block companies
from trying to salvage their profits? Yes, consumers are benefitting now, but
what happens when there are 2 options left for healthcare in each state?

I think in this case, it's clear that the hybrid Capitalist / Socialist
approach is not the way to go. Either the government needs to let health care
companies operate the way the market allows them to, or move to a single payer
system.

~~~
blocktuw
I fail to see how I as a consumer am personally benefitting. I have more
expensive healthcare that covers less and it gets more expensive and covers
less every year.

I'm sure there are a few very sick people out there who are benefitting. I'm
glad that we as a society are able to help them out. But it's clear that I do
not have choice in needing healthcare, whereas these providers do have a
choice in providing healthcare.

I agree with you that the hybrid approach is not working.

------
snsr
Kind of ironic given that Aetna is largely responsible for the elimination of
the public option from the Affordable Care Act.

Thanks again Joe Lieberman
[https://en.wikipedia.org/wiki/Aetna#Lobbying_and_campaign_co...](https://en.wikipedia.org/wiki/Aetna#Lobbying_and_campaign_contributions)

~~~
harryh
If you think a ~$100,000 a year to a politician (plus another couple million
to some other politicians) is largely responsible for the rules that govern
how 20% of our economy functions you are quite mistaken.

There are huge economic and political forces at work that render Aetna's tiny
expenditure irrelevant in the grand scheme of things.

~~~
random28345
> If you think a ~$100,000 a year to a politician (plus another couple million
> to some other politicians) is largely responsible for the rules that govern
> how 20% of our economy functions you are quite mistaken.

 _cough_
[https://en.wikipedia.org/wiki/Copyright_Term_Extension_Act](https://en.wikipedia.org/wiki/Copyright_Term_Extension_Act)
_cough_

That was purchased pretty cheaply, and industries affected by copyright(books,
movies, music, software, software) are a decent chunk of the economy.

~~~
harryh
The average member of the public doesn't care at all about copyright terms so
policy in that area is much more susceptible to this sort of thing.

The average member of the public cares _a great deal_ about their health
insurance so policy in this area is much much less susceptible to influence
with small political donations.

------
pseingatl
This is precisely why single payer is desperately needed. And proof that
Obamacare is a Rube Goldberg machine. I remember listening to a Kentucky
senator who said they were gobsmacked that no insurance company signed up in
his state. The program is based on wishes, not good practices. Having Justice
tinker with antitrust to keep it alive will never work. Insurance companies
could give a F about their policy holders, their shareholders and profits are
the only ones who count.

~~~
jlmorton
This is not proof at all that "Obamacare is a Rube Goldberg machine." This is
a major insurer pulling out the markets, but over trivial amounts of losses.

I don't know what you mean about Kentucky. There are plenty of health
insurance companies with offering on the Kentucky exchanges (Anthem BCBS,
CareSource Kentucky, Humana, Aetna, and Bluegrass Family Health). And in any
event, even if there truly were no insurance companies with offerings on the
Kentucky exchanges, I find it very implausible that either Mitch McConnell, or
Rand Paul would have claimed to be "gobsmacked." They were leaders in the
fight against ACA, and they certainly claimed before passage that the law
would destroy the health care industry.

~~~
harryh
I don't think it's fair to categorize Aetna's annual loss of ~300M as trivial.
That represents about 12.5% of their profits. If someone cut your salary by
12.5% I don't think you would think that was trivial.

~~~
jlmorton
I should clarify, I didn't mean it was trivial to Aetna. I meant it was
trivial compared to the cost of the existing subsidies and risk corridors in
the ACA, and that this is not an existential problem for ACA.

Over the past few months, several major insurers have either reduced or ended
their participation in the ACA exchanges. That is troubling news. However,
setting aside the political feasibility, it's hardly an unsolvable problem. If
the risk pool does not improve, and insurers keep losing money, then we can
raise funding for the risk corridors.

To put this in perspective, Aetna, one of the largest insurers in the
marketplace, is losing about $300 million. We're spending about $200
billion/year on ACA currently.

~~~
harryh
OK that's fair. I pretty much agree with everything you say here.

I think I am more concerned than you are that the structure of the exchanges
will make them untenable in the long term but that's certainly a judgement
call and we won't know the real answer for several years at least.

------
Apocryphon
So how can consumers respond to this corporate chicanery? In a capitalist
system, the natural recourse is for citizens to turn to the private market for
alternatives. Could this provide an incentive for Aetna's competitors to make
it easier for Aetna's customers to switch to them?

One would assume that libertarians and free marketeers would cheer the concept
of boycotts, as it is one of the mechanisms that citizens are empowered with
in a laissez-faire society.

~~~
rayiner
What corporate chicanery? They took a loss on exchange plans last year. They
have every right to pull out of the exchanges until the government makes them
stay.

I'm a supporter of single payer. But the health care market is a sterling
example of the "worst of all solutions" espoused by the Democrats. Instead of
simply raising everyone's taxes to pay for public services, they try to get
companies to do hidden cross-subsidization, propping up money-losing
individual plans with profits from group plans. And then they berate companies
for pulling out of money-losing enterprises, as if providing healthcare for
people who can't afford it is the job of private companies rather than the
government.

~~~
tptacek
You're a supporter of single payer? Health care is something like a fifth of
the whole US economy. You're comfortable with the USG setting prices for it?

~~~
harryh
I don't know about single payer, but health care is tricky. What do we do (as
a society) about this guy:
[https://news.ycombinator.com/item?id=12307526](https://news.ycombinator.com/item?id=12307526)

He has his gallbladder out and all of a sudden he's a super risky person to
insure. How do we get him in a risk pool where his premiums won't be
unaffordable?

~~~
tptacek
By shifting more of the group insurance market onto the individual market,
perhaps mostly by eliminating current incentives for employer group coverage,
to minimize the adverse selection problem.

Incidentally: two members of my immediate family have the same problem he
does. No history of serious illness, no current health problems, probably
healthier than the median in both cases for their age cohort, but uninsurable
outside the exchanges due to bogus pre-existing condition rules.

~~~
harryh
1) Can we make the individual mandate in the individual market strong enough
to really eliminate (or at least minimize) the adverse selection problem?

I am unconvinced that we can. Perhaps though.

2) Are you really convinced that the pre-existing rules you encountered were
bogus? Are insurance companies just dumb when it comes to this sort of thing?
I tend to assume, absent other evidence, that insurance companies will be
profit seeking so would only turn people down if they expected to
(probabilistically) lose money on the deal. Perhaps they're just not smart
enough to discern differences at this level though? I don't have much
experience in this area.

~~~
tptacek
I think penalties need to be sharply increased, but the problem isn't so much
free riders as it is that statistically the most attractive segment of the
market is overwhelmingly likely to be employed at a firm that offers group
coverage.

~~~
harryh
I certainly agree that employer provided health care coverage should be
taxable income (I assume that's the mechanism by which you would shift
people).

It's interesting to note that McCain proposed this as part of his campaign in
2004 and Obama pilloried him for it.

~~~
tptacek
Yep. Clinton wanted to tax employer-provided health care too. McCain and
Clinton were right about that --- but Baucus, and I guess by extension Obama,
was right about the individual mandate.

------
uptown
The public is starting to get a peek at the 2017 rates. To put it lightly,
they're not pretty. This post shows the proposed premium increases, averaging
around 24%. It's likely these may land somewhere below those numbers, but the
cost of simply being insured before any co-pays or paying any deductibles has
rapidly become unsustainable for a huge percentage of the population,
especially the middle-class who earn too much for subsidies but not enough to
cover the costs of proper insurance and care.

[http://www.zerohedge.com/news/2016-08-15/obamacare-
sticker-s...](http://www.zerohedge.com/news/2016-08-15/obamacare-sticker-
shock-average-2017-premium-surges-24)

~~~
addicted
The "leaked" numbers have always been higher than what actually happens.

The insurance companies always propose higher increases in order to have a
stronger bargaining position, and those numbers have historically been
bargained down to something decent.

~~~
uptown
Absolutely. But I'd wager the vast majority of the increases land well above
the rate of inflation. And since open-enrollment begins a few days before the
Presidential election, it'll be interesting to see how those numbers are
managed given that Hillary has hitched her campaign to the Affordable Care Act
as an extension of her original campaign for universal health insurance when
she was First Lady.

~~~
coredog64
As it's unlikely to be a competitive race by then, I would expect that certain
people will be reminded of certain aspects of the power of the executive
branch and that will be that.

------
rrggrr
You can either have a system where everyone is covered at great relative
expense to the healthy, or one where everyone is covered at great expenses to
taxpayers. Either way, quality of care, breadth of services and speed of
access are going to suffer. Demographic reality is inescapable.

~~~
zaroth
Only 5-10% pay the majority of taxes, but almost everyone is, eventually, not
healthy.

Another way to put it is that average lifetime healthcare cost is about $250k
for men, $350k for women.

So yes, definitely people should be paying for health insurance while they are
healthy, so that they can also have it when they are sick.

In a sense, health insurance should be priced just like a $250k/$350k term-
life policy that you take out at birth.

~~~
antisthenes
> Another way to put it is that average lifetime healthcare cost is about
> $250k for men, $350k for women.

Do you have a source for these numbers?

~~~
zaroth
The Lifetime Distribution of Health Care Costs
[http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1361028/](http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1361028/)

------
twblalock
I don't understand why so many private insurers participated in the exchanges
in the first place. It seems pretty obvious that the people who need to
purchase from the exchanges are less likely to be healthy than the general
population, because they probably haven't had much preventative care in the
past, due to their prior lack of insurance, and also because poverty and poor
health are highly correlated.

Imagine that you ran a car insurance company, and the government set up an
exchange where the least-skilled drivers could purchase insurance. Would you
participate?

------
ihsw
This is a worst case scenario for Obamacare -- the leverage that empowered the
insurers to dictate the terms of the ACA never went away, and it won't anytime
soon.

Anything less than the Federal government threatening to nationalize Aetna
would be insufficient, lest the Obama administration wants to appear weak and
invite further dissent.

Just another reason why single-payer is the best option.

------
MrZongle2
And if the merger _isn 't_ blocked, what guarantee does Aetna make that they
won't drop out of the exchanges anyway?

~~~
mikestew
It does have the distinct smell of the broadband subsidies: "Give us money if
you want us to roll out high-speed broadband."

"Thanks for the check. Oh, BTW, we decided high-speed broadband wasn't really
working for us, so we nixed it."

Aetna deal goes through: "Shockingly, we're still losing money on exchanges,
so we're not going to do that anymore. Thanks for letting that merger go
through, though."

------
nfriedly
Good riddance. Heath insurance in the US seems to benefit the insurance
companies more than anyone else.

~~~
harryh
That's silly. Insurance is a great method of hedging risk. If my apartment
burns down it would cost me A LOT of money to replace my stuff. But the
chances of it burning down are really small. So I can purchase renters
insurance for just a couple hundred bucks a year, an expense I can easily
afford.

That benefits me a great deal!

Maybe when you said insurance you meant to say "health insurance" but the same
principle applies. If I have a heart attack then treating it will be hideously
expensive, but that's also unlikely to happen.

~~~
philjohn
Except a building isn't almost certain to burn down during its lifespan.
Humans, metaphorically, burn down at a much higher rate. Cancer, heart
disease, systemic infection ...

"Spreading the risk" doesn't work when the likelihood of something bad
happening approaches a percentage in the high double digits, especially with
an ageing population and falling birth rates to keep paying into the ponzi
scheme.

~~~
dredmorbius
That actually raises an interesting question: what _have_ the changes in
building fire risk been over the past 150 years or so?

Historically, instances of _entire cities_ burning were commonplace enough to
be noted: the Great Fire of London (1666), the Great Chicago Fire (1871), the
Baltimore Fire of 1904, the Great Fire and Earthquake of 1906 in San
Francisco.

The Oakland Hills Fire of 1991 was actually the biggest urban fire in the US
since the 1906 San Francisco event.

There's a list of fire-related losses here, though it includes terrorist
(9/11) and industrial accident events: [http://www.nfpa.org/news-and-
research/fire-statistics-and-re...](http://www.nfpa.org/news-and-
research/fire-statistics-and-reports/fire-statistics/fires-in-the-us/large-
property-loss/largest-fire-losses-in-the-united-states)

Among the changes I can think of:

1\. Better alerting systems.

2\. Standardisation. Baltimore and Oakland Hills both saw incompatible hose-
hydrant couplings.

3\. Building standards. Everything from fireblocks and exits, to sprinkler
systems.

4\. Replacement of candles, oil lanterns, and gas lighting by electricity.
Electrical fires happen, but they're _far_ rarer. The Great Chicago Fire was
caused by a lantern.

5\. Safety and certification ratings of equipment, appliances, and wiring.
"Underwriters Laboratories", the source of the ubiquitous (in the US) "UL"
logo, was created by insurance companies.

That is: _appropriately_ collectivising risks can result in _reduced overall
risk_.

------
swalsh
Only tangently related, but I strongly encourage anyone who has interest in
learning more about the state of the industry and how technology relates to it
read this book: [https://www.amazon.com/Digital-Doctor-Hope-Medicines-
Compute...](https://www.amazon.com/Digital-Doctor-Hope-Medicines-
Computer/dp/0071849467)

------
fredgrott
There is a solution to this..

If there was say a more market based price tier and that tier to Obamacare was
made up of both US Federal workers plans and State workers plans than there
would be a huge amount of healthy people in the whole group and private ins
co's would be striving to be part of ObamaCare as their costs than would not
exceed their revenues.

------
loteck
If we are unwilling to confront the bloody, economy-crashing hellscape that is
the foreseeable result of a system that only provides non-emergency care to
people who can pay, then it seems like socializing the costs of care is the
only method that could be made to be sustainable.

------
CodeSheikh
We need a serious disruption of insurance industry. A paradigm change.

------
ksnieck
I don't really understand how this is a threat without understanding whether
Humana is on the same exchanges and what other providers are on those
exchanges. Journalists seem to get really excited when they get some inside
scoop.

------
british_india
Single Payer.

------
dang
Url changed from [http://www.npr.org/sections/health-
shots/2016/08/17/49020234...](http://www.npr.org/sections/health-
shots/2016/08/17/490202346/aetna-ceo-to-justice-department-block-our-deal-and-
well-drop-out-of-exchanges), which points to this. Strange world when HuffPo
has the more original source and the more substantive piece than NPR...

------
saosebastiao
Good. Block their deal, let them drop out of obamacare, and then give us the
Single Payer that we've always deserved and watch those fuckers go bankrupt
like they've always deserved.

~~~
skylan_q
i couldn't in any good conscience support single-payer or socialized medicine
it's the same economic model that created breadlines

~~~
vidarh
Gee, I missed the bread lines when I grew up in Norway, and I must've managed
to miss them in the UK too.

~~~
skylan_q
I live in Canada so I get "free" healthcare as well.

Norway's system of delivering food isn't a full socialist/single-payer model,
so you wouldn't get breadlines there.

~~~
vidarh
So your earlier comment is entirely irrelevant then, seeing as we're not
talking about bread delivery, but delivery of healthcare, where - irrespective
of whether we'd agree on the feasibility of efficient delivery of "singlepayer
bread" \- it has been conclusively proven by example that efficient delivery
in a single payer model is possible.

In fact, not only is it possible, but almost every country in the world that
has it does it cheaper than the US (depending on currency fluctuations, Norway
is ironically one of the less than a handful of countries that is occasionally
more expensive than the US - largely driven up by high salaries).

~~~
skylan_q
Ask yourself what those studies measure and if you can honestly consider those
measures fair measures of quality, quantity and equity in providing care.

It usually boils down to $5,000 for surgery X in one country, $8,000 for same
surgery in another. What an analysis like this always skips is the care that
wasn't provided that should have been provided.

~~~
vidarh
The WHO ranking does not look at costs, but at overall health and treatment
indicators.

------
warfighting
How long would a government run tech company survive in the valley? Now tell
me again why you want them centrally planning your healthcare?

~~~
csallen
I never understood this mindset. It assumes that the govn't is incompetent
(which it often is in many areas, fair point), but then ignores the most
obvious response, which is to diagnose and fix the problems at hand. Simply
abandoning the government solution is not the only option. In fact, one of the
government's biggest problems is that so many people are obsessed with
neglecting/sabotaging it just to prove some point that it's bad.

~~~
zeveb
> It assumes that the govn't is incompetent (which it often is in many areas,
> fair point), but then ignores the most obvious response, which is to
> diagnose and fix the problems at hand.

It's utterly impossible to fix the problems of government competence because
Americans don't want their government to be competent. They want it to be
supportive, and diverse, and all sorts of things, but competence is not one of
them.

If American government were competent, it would hire precisely the people
whose unions donate so much to American politicians.

