Aetna’s recent announcement that it will stop selling policies on most of the Affordable Care Act exchanges has some critics declaring that “Obamacare” is on the verge of a collapse that will prompt the federal government itself to provide insurance to millions of Americans at the cost of billions of tax dollars.
I don’t know about that last part, but Obamacare is certainly in a rough spot. Aetna is pulling out because selling policies to individuals on the exchanges has proven unprofitable. UnitedHealth Group came to the same conclusion earlier this year and announced its intention to end participation in the ACHA exchanges.
Those departures will reduce competition on the exchanges with the likely result that the often sky-high premiums that Americans pay for exchange-bought policies will continue to rise. A healthy self-employed acquaintance of mine currently pays $407 per month for an individual policy that has a $6,000 annual deductible, pays nothing out of network, and limits the hospitals he can use – even in an emergency. He fully expects that premium to jump up in January.
Those crazy rates are one reason many healthy young people are opting not to buy insurance and simply pay the fine imposed on their taxes for going without a policy.
Long-time critics of Obamacare are crowing that eventually, every insurance carrier will leave the exchanges. If that happens, say the critics, the government won’t just admit defeat and repeal the ACA. Instead, the government will go into the health insurance business, especially if Hillary Clinton is in the White House. Given the public sector’s general ineptitude, that would end up costing taxpayers untold billions — a significant portion lost to waste, fraud and abuse.
I think some of this recent handwringing and gloating is a bit premature. While Obamacare has its’ problems, it’s too early to write off the program. If you’re considering an early retirement you should hope the ACA survives until you are 65. That’s when you can go on Medicare. If you leave your career any younger, you’ll need to buy health insurance for you and your spouse. As noted above, there aren’t any bargains on the exchanges, but at least you’ll be covered. Budget about $1,000 a month for you and your spouse.
Ironic, isn’t it? Obamacare was created with the noble intent of helping the poor get coverage and care. Yet the some of the biggest beneficiaries are successful people looking to retire early. Ah, Congress – masters of the unintended consequence!
Cover Image – Copyright: Ken Durden