Kevin Drum made a rather bold claim recently in an article for centrist malcontents Mother Jones: the Affordable Care Act is untouchable despite the imminent Republican control of all three branches of federal government. The basic idea is that (1) Republicans cannot repeal the pre-existing conditions protection; (2) insurance companies need a substantial federal healthcare infrastructure in order to afford taking on clients with pre-existing conditions; therefore (3) Republicans cannot substantially repeal the Affordable Care Act because it would cause the individual insurance market to collapse.
The problem with Drum’s argument is simple, and as much as I wish there was a more eloquent way to express it, this statement does seem best: the Republicans do not give a fuck. This is something that liberals continually underestimate: liberals thought they cared enough about stability to not vote for Trump; liberals thought they cared enough about stability to not allow the government to get shut down; liberals thought they cared enough about stability to be shamed into confirming President Obama’s nomination to the Supreme Court.
Why do they not care? Because crisis has always been profitable. And the incredibly successful branding of the Affordable Care Act as Obamacare almost guarantees that if and when the health insurance system collapses, it will not be blamed on the Republicans (and of course, the Democrats would have some blame were it to collapse today but a repeal without a replacement is a whole other monster). If anything, the collapse will finally give them the political capital to repeal even the more popular of the Affordable Care Act provisions like the pre-existing conditions protection.
So where do the insurance companies fit into this? Let me follow up on the FOIA request I mentioned in my previous post on the Affordable Care Act. As I mentioned in that post, the so-called risk adjustments are actually federal government subsidization of insurance companies. Unlike some of my Leftist colleagues, I do think to some extent President Obama does care about people (at least, those in this country) and wanted to make the healthcare system better. But his mistake was believing that health insurance companies can be bribed into going against their profit motives. This is the mistake that liberal-progressives make time and time again: the profit motive cannot be redirected. All that subsidies do is increase the companies’ profits, and you can be sure that on Day One they were thinking “So how can we get as much money out of this as possible and then run back to our previous cost-effective business models?”
I am picking on Aetna in particular because they recently withdrew, but it goes far beyond them. The federal government gave $5,821,449,626.45 in these risk-adjustment subsidies in 2015, or 0.4% less than Cuba’s (way more effective) healthcare spending. Blue Cross Blue Shield of Texas alone took in $622,460,036.59 in 2015. For 2014 and 2015 (the only records), $8,691,449,626.45 was spent. In 2014 Aetna received subsidies $5,014,622.43. But it is true that 2015 was not a great year for them: they received $41,172,619.13. Wait a second…
As previously discussed, Elizabeth Warren and others suspected that this pull out was connected to the Aetna-Humana merger. And now that case is starting to heat up. Oh, and it is also worth mentioning that Humana received $206,335,996.16 in risk adjustment subsidies.
And by the way, these poor companies not getting enough subsidies from the federal government made $2.7 billion (Aetna) and $1.28 billion (Humana).
I try to end my blogposts positively but I do not have much to say here. Corporations were given billions of your dollars to make sure they got total year profits above $1 billion. And whatever the Republican Party does in 2017, it will likely speed on the death of a healthcare system that tried the impossible task of reconciling the profit motive with universal healthcare.
There is no compromise with capitalism in universal healthcare. One of them has to go.