Seeing it coming

In the 1997 film "The Devil's Advocate," John Milton (Al Pacino) says, "No matter how good you are, don't ever let them see you coming." The broad theme of the movie is that winning is everything. In a tale as old as time, southern attorney Kevin Lomax begins with good intentions, but somewhere along the way things go very, very wrong.

Reading the health care news of late, it is really difficult to determine if the folks behind the ACA really thought we wouldn't see them coming or if they just didn't care. Were they sneaky or brazen? Maybe we don't have to choose just one! Were the ACA framers imbued with good intentions or did they create a plot as twisted as that movie – with a particular ending in mind? I don't think we will ever truly know the answer to that question, though recent events – completely foreseeable – may be instructive.

While taking questions at the end of a keynote address some years ago, one of the audience members thought they had connected the ACA dots so that they drew and intentional picture of a collapse of the current system followed by a hue and cry for the government to put out the fire they had set to burn the current insurance system to the ground, sweep away the embers and rescue the populace from the clutches of evil. He wanted to know if I saw that too, and if I thought it was deliberate.

At the time, even I was surprised by my answer. I suggested to the audience that there were two ways to look at the situation. Either the ACA framers were stupid (or oblivious – pick your pejorative) or they had an agenda. I finished by opining that if anyone thought it was the former, they ought to reconsider.

Fast-forward several years and it is apparent that my questioner's vision of how those dots connected was, sadly, correct. It may have begun as a small brushfire, but the fast-moving conflagration is now threatening to burn down everything in its path.

In April we got the news that United Healthcare was pulling out of 26 of the 34 exchanges in which it offered coverage. The company had issued a warning as early as November 2015, but in mid-April of this year they announced that they had lost $475 million on marketplace plans last year and that they were on target to lose $650 million in 2016. This is clearly not a sustainable business model for the carrier.

For consumers in the markets United Healthcare served, the result will be higher prices and fewer choices, which is exactly the opposite of the stated goals of the ACA. According to an analysis done by the Kaiser Family Foundation, in more than 30 percent of the 1,855 counties United served, their departure could lead to a drop from two choices to just one.

United's was the first shoe to drop, but it was not the last. In April, Aetna CEO Mark Bertolini told a health care conference that, "We believe we have an obligation to stick it out and work with it until we know that it won't work." Just four months later, faced with $300 million in marketplace-related losses, Aetna announced a massive scaling back of their participation, moving from participating in 546 counties in 11 states to just 242 counties in four states (Delaware, Iowa, Nebraska and Virginia).

It isn't just big carriers taking their lumps in the post-ACA world. In July Connecticut CO-OP HealthyCT announced that it was closing its doors, making it the 14th co-op to shut down. The viability of the nine remaining CO-OPs is in question as they face a staggering $130 million they must payout through the ACA's risk adjustment program.

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