On Wednesday, Cigna CEO David Cordani said the giant insurer won’t commit to offering policies on the ObamaCare exchanges beyond next year. This, just two weeks after a similar announcement from the country’s largest insurer, UnitedHealth.
The problem: Exchange policies (written by Democratic politicians and bureaucrats) turn out to be a good deal only if you’re sick. Healthy folks have been opting out — so not enough are paying premiums to make selling the policies profitable.
One gimmick might keep insurers in the game: The law’s “risk corridor” provision allowed Washington to tax profitable exchange plans to prop up unprofitable ones.
But even in Year One, there weren’t enough profits to cover the losses — so Team Obama transferred money from elsewhere.
This subsidy was entirely distinct from the law’s support for lower-income folks: It was a bailout for the companies. Sen. Marco Rubio (R-Fla.) put a stop to that last year, passing an amendment that prevents these back-door bailouts.
Without the extra taxpayer dollars, the administration can only deliver about 13 percent of the bailout cash needed this year. So it can’t save the money-bleeding nonprofit “co-ops” the law set up either. More than half these nonprofits have failed already.
Firms like Cigna will have to either quit the exchanges — or raise premiums. But higher prices will push more customers — especially healthier ones — to the exits.
Which will force more price hikes . . . leading to the total collapse that insiders term a “death spiral.”
