On Monday, Andrew Ferguson wrote on the government's feeble and insulting attempt to explain why insurance premiums were rising precipitously under Obamacare, contrary to what was promised. This is just scratching the surface of Obamacare's current woes.
On Monday evening, Aetna, one of the nation's largest insurers, announced it is pulling out of the Obamacare insurance exchanges in 11 of the 15 states it currently operates. According to Business Insider, Aetna "determined that the nearly $300 million in pretax loss it was sustaining on an annual basis was not worth the business." Which is an understatement, to put it mildly.
Two other top-five insurers already announced plans to pull out of Obamacare earlier this year. In July, Humana said that next year it "will only offer individual plans in 156 counties in 11 states, down from 1,351 counties across 19 states this year." And the CEO of the nation's largest insurer, United Healthcare, announced in April "we will remain in only a handful of states." United Healthcare had previously said that it lost $475 million last year on its policies in the Obamacare exchanges.
In response to this clear and dramatic failure of Obamacare, there has been no reassessment or calls to fix the health care law. Instead, President Obama has renewed calls for a "public option" to provide insurance coverage. Democratic nominee Hillary Clinton has also come out in support of a public option.
Let's be clear about what a public option would be. Major insurers with decades of experience sustaining their business on narrow profit margins are losing hundreds of millions of dollars annually under Obamacare's current rules and mandates. The public option is predicated on the belief that the government could build its own insurer from the ground up, run by bureaucrats, and do it more efficiently and economically than private insurers.
Yet the government's previous foray into health coverage, Medicare, currently has tens of trillions of dollars of unfunded liabilities. Medicare is so poorly managed, it loses $60 billion in fraud a year. And this goes without mentioning the fact that the government couldn't even build Obamacare's websites without them turning into disastrous money pits.
It would be simply insane to think a public option is workable. The only difference would be that shareholders wouldn't have to take it when insurers lose money. But when taxpayers are put on the hook for billions in losses, they have almost no choice but to pay for it.