United Healthcare Pulls Out of Georgia – Thoughts on Health Care

United Healthcare is pulling out of the federal exchange in Georgia for 2017. You’ll see headlines about how this means Obamacare is on its last legs, or showing how overbearing progressive policies are bad for consumers. Healthinsurance.org has an article about the Georgia exchanges that has a bit more perspective. I would like to point out a few things about what this actually means in my opinion.

First, Georgia doesn’t have an exchange of its own. It opted to use the federal exchange provided for the states that refused to accept them. What’s more, Georgia actively created laws to prevent the creation of state-run marketplaces and make it harder for navigators to help people get coverage. In Georgia, a navigator must pass the same exam as insurance agents in order to be able to give advice to potential subscribers.

Second, according to this article, United Healthcare had less than 1K individual subscribers in Georgia, with most of their subscribers being in group plans. As such, it strikes me as disingenuous of United to paint their problem as being a gross profitability issue caused by ACA policy when in fact it probably was simply inconvenient for them to operate on such a small scale in the state. It is worth noting that their subsidiary Harken Health has signed up over 30,000 members in Atlanta and Chicago and will continue to remain on the exchanges. (Disclosure: I am subscribed to Harken and so far have been moderately satisfied with the insurance part and ecstatic about the primary and preventative care part).

Georgia has also opted out of Medicaid expansion, passing on billions in federal funding that would have created lucrative medical jobs and leaving nearly 300,000 Georgians earning too much to qualify for federal Medicaid, but too little to afford unsubsidized premiums. The principled stand is supposed to be that the program will ultimately cost Georgia too much money, but the data so far has not pointed to that. Instead, Georgia has opted to send federal tax dollars from their residents to provide health care to people in other states that did accept Medicaid expansion.

I find it interesting that the same politicians that favor deregulation and competition turn a blind eye to the mergers of the largest health care companies and pass red tape legislation to make it harder for an existing federal program to be successful. I have also not yet seen a credible alternative to ACA presented that would address the pre-ACA issues insurance companies had with refusing to pay for care and rapidly escalating premiums. What, then, is really motivating such staunch resistance to the simple question of how to get more people health insurance?

There’s an increasingly libertarian bent to arguments I hear from my conservative friends about the way things should be. The government is always bad at everything, and wants to take away your freedom at the point of a gun. Private companies have your best interests at heart because they’ll be motivated by a desire for profit and good reputation, and efficient markets will sweep away those that cannot provide the quality of service required for both. It is the responsibility of individuals to make optimal choices and protect themselves at all times, and the market can hold companies responsible for business done in bad faith.

This vision of how the world should work is attractive, especially if you believe that you are extraordinary. As much as I find libertarian ideals attractive, I find that when they hit the ground, there are some issues. Markets are great at what they do, but markets require open information. The American health care system is profoundly lacking in that, with dozens of prices for every item and procedure used, depending on who is ordering it and how it will be paid for. Try asking a provider how much anything costs. They couldn’t tell you if they wanted to, but most will answer, “I have no idea”.

Beyond the fact that the health care market is currently opaque, the myth of halcyon days of quality care before ACA took effect is false. Insurers were free to deny coverage to people due to diagnoses, culling the expensive cases and keeping the cheap ones, and there was no provider of last resort in most places. I was personally affected by this and had loved ones go without coverage for years until ACA took effect. I also paid for my own insurance out of pocket as an individual from 2003 to today, and I watched prices climb even faster than people complain about today. When the first ACA provisions took effect, my premium was cut by more than 50%.

At a deeper level, non-aggression and altruism are not natural human states, though it can be cultivated and encouraged in culture. I don’t think that removal of regulations automatically leads to Mad Max. However, given how companies try to take advantage of individuals as much as they can now even in the face of regulation and protection, I don’t see how removing regulations and protections would lead to less fraud. I also don’t believe that I’m so good at discernment and so popular or good at marketing that I could determine fraud, stop patronizing a business, and get enough others to do the same to shut a bad business down. Even if I dodge the bullet, someone else gets hit.

A more libertarian framework could work if people got serious about introducing competition enhancing measures along with the measures to unfetter corporations from regulations and limitations. We could use modern technology and new data aggregation and processing techniques to distribute more information in real time, keep everything visible and above board, keep private businesses a bit more honest. Frankly though, I’m busy enough trying to manage everything else in my life, and I don’t want to have to become an expert in health care administration and analysis just to go have my cough seen about.

Conservative politicians talk a libertarian game but are only interested in freeing corporations’ hands, assuming that in their benevolent interest in profit, they’ll do what’s best for consumers, and let the benefits trickle or rain down from the top. Until we can couple that with digestible, accessible information, and a media more interested in corruption than sensation, the net effect of deregulation will be continued massive profits for an oligopoly of companies and worse outcomes for consumers.

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