We can’t keep up. Every week we have a list of stories we want to address, and every week we fail to get to at least one of them. And that means our list of unaddressed – but presumably important – stories gets longer and longer as the weeks roll by.
The following story is one we didn’t want to let make it to that list. We know that it probably doesn’t provide enough material to fill a full (or even a half) newsletter, but we wanted to make sure you saw it.
This past week, as some of you may know, the managed health care/health insurance company Aetna announced its first quarter earnings data. And lo and behold, squirreled away in that data was this important bit: Aetna is now, more or less, an agent of the federal government. Writing at Axios, Bob Herman put it this way:
Here’s a nugget that encapsulates the health insurance industry, despite all the noise surrounding the future of the Affordable Care Act: In the first quarter of this year, Aetna collected more premium revenue from government programs (namely Medicare and Medicaid) than it did from commercial insurance for the first time ever.
Now, we know that this “big” health care story this week is supposed to be the House’s long-delayed and less-than-ideal repeal of Obamacare (the Affordable Care Act), but we’re not really buying it. The “free market” in health care is dead, regardless of what Congress and the President do. And Aetna shows why that’s so.
It is worth remembering, along these lines, that Aetna is almost entirely out of the Obamacare business. In February, the company’s CEO Mark Bertolini stated that the Obamacare public exchanges have entered the dreaded “death spiral” and that his company and other providers are anxious to leave this market that is now devoid of any real risk-sharing. And indeed, as Tom Herman notes, Obamacare premiums accounted for only about 2% of Aetna’s first quarter revenues.
Or to put it another way, this is an issue that goes far beyond the ACA and its possible repeal. Government payments are where the money is – now and in the future – and the smart CEOs know it.
Thursday night, in an appearance on Fox News, the columnist Charles Krauthammer predicted that within the span of a few years, the United States will have a “single-payer system.”
Look at the terms of the debate. Republicans are not arguing the free market anymore. They have sort of accepted the fact that the electorate sees health care as not just any commodity. It’s not like purchasing a steak or a car. It is something people now have a sense that government ought to guarantee.
We hate to say it, but given the Aetna news, we tend to think he’s right. Not only have the people come to see health insurance as an entitlement, American business has come to see government as the supplier of revenue.
As we have written countless times over the last couple of decades, the biggest problem with public policy in this country is that the administrative state dominates the process and gets precisely what it wants – with elected officials and big business complicit in destroying anything that even resembles free-market capitalism. Aetna knows that its future depends not on competing for individual or even company insurance contracts, but with securing the greatest number of contracts from the greatest source of revenue ever in the history of man, good ol’ Uncle Sam. This is corporatism, plain and simple.