Health Plan Costs Set to Soar

The cost of Affordable Care Act policies in North Carolina seems poised to rise sharply, as Obamacare’s death spiral looms.

Insurer Aetna is going to dump its individual Affordable Care Act (ACA) policies in North Carolina and 10 other states, the news media report. The reason: the company estimates it will lose $300 million this year on the plans. (The company will still offer individual policies, but outside of the ACA.)

What does this mean for people here? The only remaining company to offer the ACA policies across NC is Blue Cross Blue Shield of North Carolina. Cigna has said it will offer the polices in the Triangle area, but it looks like only Blue Cross will offer them statewide.

It’s not a knock on Blue Cross to point out the obvious: consumers and regulators have little leverage on a monopoly, and that’s what Blue Cross will have. Blue Cross had already asked for an 18.5 percent increase.

The bigger story is that Aetna’s move is just one more sign of what ACA critics have long said: the whole Obamacare system is destined to fail.

“Aetna isn’t the only insurer giving up on Obamacare,” health expert Sally C. Pipes recently wrote. “UnitedHealth, America’s biggest insurer, will sell plans in just three states next year, down from 34 this year. Humana will offer coverage in just 156 counties in 2017, 88 percent fewer than this year.  In other words, the insurance ‘death spiral’ has arrived.”

The Obamacare policies are no bargains. They have such high deductibles, copays and premiums that most people avoid them, even if they have to pay fines for being uninsured. So only really sick people sign up, and many of them dump the policies once a health crisis has passed. The companies take in less and less money, while their costs skyrocket.

Maybe that’s why its popularity is falling among unaffiliated voters, a key bloc. That’s a formula for failure: skyrocketing costs, falling support.

What happens when the Obamacare system crashes? As many have said, when something can’t go on forever, it won’t. I heard Donald Trump predict the collapse of Obamacare would be one of the first crises he’d face if he is elected and sworn into office in January. He sounded worried about it. We all should be.