Health insurers have been taking a financial beating for the ages on ObamaCare, butAetna was always more bullish than the rest of the industry—until now. The entitlement’s keenest corporate patron announced Tuesday that it is cancelling its ObamaCare expansion plans for 2017 and may withdraw altogether.
Aetna posted fabulous second-quarter earnings, though the exception is its Affordable Care Act line of business that the company expects will lose more than $300 million this year. Aetna runs ObamaCare plans in 15 states and planned to join another five exchanges. But now it says it will undertake “a complete evaluation of our current exchange footprint, as the poor performance of these products warrants such an analysis,” as CEO Mark Bertolini put it on an investor call.
As recently as April, Mr. Bertolini called ObamaCare “a good investment.” At the big J.P. Morgan health-care conference in January, he said the law’s goal of universal coverage is “incredibly important” and suggested this social mission helped offset the company’s losses on the exchanges for ObamaCare first two years. “This is our first attempt to make this happen,” he added at the time, “and we believe we have an obligation to stick it out and work with it until we know that it won’t work, and I believe it is too early to give up on this process.”
Mr. Bertolini rehearsed these themes on the Tuesday call but also noted that “at the same time, we are committed to being good stewards of our balance sheet.” Well, yes. Publicly traded insurers like Aetna can endure losses for a time but eventually they need to make a profit to stay in the market.
Beyond Aetna, most insurers including nonprofit Blue Cross Blue Shield plans are hemorrhaging cash amid rising costs, disappointing enrollment and the failing ObamaCare co-ops. UnitedHealth Group said in April it would liquidate all its Affordable Care Act coverage. About the only companies above water are Medicaid contractors accustomed to delivering a lower standard of medical care.
Mr. Bertolini has proposed thoughtful reforms that could mitigate the flight of insurance sellers and buyers, but all entitlements are inherently political. As long as command-and-control liberals are in charge of U.S. health care, companies that put their trust in government can’t serve their shareholders. It’s a tragedy the health insurance lobby lied to itself and its shareholders about this reality when it supported ObamaCare in 2010.