Health insurer Humana will concentrate on improving insurance products for the elderly instead of selling plans on Obamacare exchanges or working with the U.S. Senate to pass the American Health Care Act (AHCA).
The health insurance giant is focusing its attention on organizational strengths it has identified since the Affordable Care Act (ACA) became law in 2010, Humana CEO Bruce Broussard said at a shareholder meeting at corporate headquarters in Louisville, Kentucky on April 20.
“The exiting of the exchange is more about where we believe we can add more value than the political environment as a whole,” Broussard said. “Our engagement with the administration and with Congress is really around how can we advance taking care of seniors.”
Humana will no longer sell insurance plans on Obamacare exchanges in 2018, assuming ACA remains in effect at that time, the company announced in February. Other major insurers, including Aetna, Anthem, and Blue Cross Blue Shield, have reduced plan offerings in many regions of the country since ACA went into effect in 2013.
Currently, individuals in more than 1,000 counties do not have a choice of insurers when shopping on the Obamacare exchanges, Bloomberg reported on April 27.
Call to Action
Justin Danhof, general counsel and director of the Free Enterprise Project at the National Center for Public Policy Research, attended the Humana shareholder meeting. Danhof says Humana has a responsibility to suggest heath care reforms in the best interest of patients.
“Humana and other insurers helped create our current, failed system with liberal politicians.” Danhof said. “It is incumbent on insurers and major pharmaceutical companies to help fix the system. Humana has a moral obligation to help the millions of Americans that are suffering under Obamacare, because [it is] a root cause of that suffering.”
The U.S. House of Representatives passed AHCA, which would repeal key parts of Obamacare, on May 4. The Senate is considering the bill.
Danhof says Humana should help persuade the public to support the repeal and replacement of Obamacare.
“Any sort of reform will need the support of the American people,” Danhof said. “As the face of the health care system to most Americans, the insurers can and should play a major role in explaining the benefits of Obamacare’s eventual replacement.”
Linda Gorman, director of the Health Care Policy Center at the Independence Institute, says Humana warned the U.S. Department of Health and Human Services (HHS) that ACA would escalate premiums and drive off insurers.
“Humana was actually a good actor in all of this,” Gorman said. “It sent a letter explaining what Obamacare would do and was slapped for it by HHS. It then shut up like the rest of the companies.”
Insurers marketing primarily to individuals have folded under ACA, leaving patients with fewer insurance options, Gorman says.
“Obamacare has done huge damage to the companies that had individuals as their primary customer,” Gorman said. “Many of them have gone out of business. This has made their customers worse off. For those who generally support having government push people around when it comes to health care and so many other things, this is a feature, not a bug.”
Mind Your Business
Insurers should focus on crafting better insurance products, not drafting legislation, Gorman says.
“I don’t see why insurers should work with the government,” Gorman said. “They’ve lost a ton of money on a bad bet. Let’s call it a learning experience.”
Collaboration between insurers and regulators creates opportunities for corruption and coercion, Gorman says.
“If people ask insurers what would work, I’d hope insurers would educate them on how the business operates,” Gorman said. “Other than that, it would be great for everyone if government would stop browbeating people to do things that are against their self-interest or doling out favors to its cronies.”
Danhof says a transparent legislative process would prevent insurers from carving out kickbacks.
“Most folks had no idea that major health insurers were going to get such massive bailouts through the risk corridors and other ACA provisions,” Danhof said. “Once folks realized this, conservatives worked to stop this corporate welfare.”
Insurers who colluded with the Obama administration on ACA owe it to the public to help repeal it, Danhof says.
“They made a bad deal with President Obama, and [so] they are never going to make another deal again?” Danhof said. “That’s hardly an answer. Humana is a child that made a big mess and then left the party for someone else to clean it up. That’s not leadership. That’s shirking its responsibility to the public.”
Under AHCA, individuals who buy health insurance would earn tax credits, which would be paid to insurers.
A better idea is to give tax dollars to patients instead of insurers, Gorman says.
“The last thing we need are more insurer subsidies, because that just increases dependency,” Gorman said. “If you must subsidize, subsidize patients.”
Matthew J. Bolduc ([email protected]) writes from Washington, DC.
Michael T. Hamilton, “Unlawful ACA Payments Prove a Catch-22,” Consumer Power Report, The Heartland Institute, April 25, 2017: https://heartland.org/news-opinion/news/unlawful-aca-payments-prove-a-costly-catch-22
Michael Hamilton and Justin Haskins, “To Save Obamacare, the President Plots a Massive Bailout of Health Insurers,” National Review, November 14, 2016: http://www.nationalreview.com/article/442157/obama-administration-obamacare-health-insurer-bailout-planned-save-law
Matthew Glans, “State ACA Exchanges an Expensive Failure,” Research & Commentary, The Heartland Institute, August 1, 2016: https://heartland.org/publications-resources/publications/research–commentary-state-aca-exchanges-an-expensive-failure