Feb 16, 2017

No, The Humana News Doesn’t Mean Congress Should Double Down On Obamacare

Post by Geoff Holtzman

In response to Humana’s decision to exit Obamacare’s marketplaces next year, some are suggesting that Republicans must take steps to save the law’s exchanges from complete collapse. Yet, as Humana made abundantly clear in its announcement, Obamacare’s structural failure is what has driven away insurers. Thus, why would the solution be to double down on a law that hasn’t worked, and won’t work?

As Humana explained in its announcement earlier this week, Obamacare’s failure to create a balanced risk pool made it impossible for the company to continue offering coverage through the law’s exchanges without suffering massive losses. Obamacare supporters will try to claim that Humana is simply reacting to market uncertainty caused by plans to repeal the law, but don’t be fooled by that spin. The truth is, Humana expressed deep concerns about Obamacare’s stability long before repealing the law was even a remote possibility in Congress.

In fact, almost exactly one year ago, the insurer announced that it may withdraw from Obamacare’s exchanges after incurring huge losses on such policies in 2015. As the Louisville Business Journal reported, Humana attributed its financial struggles to “government‐mandated product designs that attract higher‐utilizing members.”

In other words, Humana was correctly pointing out that Obamacare’s central pillar, “government-mandated product designs,” is the very thing driving providers out of the law’s exchanges, leaving millions of Americans with canceled plans and fewer choices.

So, what can policymakers do to reverse the mass exodus of suppliers caused by Obamacare? Well, for starters, lawmakers can fully repeal Obamacare, including the law’s costly regulations on insurers, which would help foster new product innovation spur competition that would bring down costs. Congress could then return regulatory authority to states, who would be free to implement solutions that best meet the needs of their respective populations (you can learn more about these reforms and others by clicking here).

One thing is certain, though; The wrong response to the Humana news would be to double down on a failed law. Obamacare must be fully repealed before it can inflict even more damage on millions of Americans who need relief.