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Health insurers should shrug, hard

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Atlas Shrugged is a novel set a world in which the productive people get sick of government red tape and go on strike.

In my opinion, it’s about time for U.S. health insurers to shrug. 

To some extent, they already have gone on a very polite, quiet strike, by “reducing their Affordable Care Act exchange footprint” and refusing to pay agent and broker commissions in the individual health insurance markets in which they continue to operate.

But, given that even Republican candidates and officials have been talking about them as if they were the useless spawns of Satan, it would serve the United States right if the health insurers could figure out how to transport all possible operations to a resort hidden deep inside a volcano somewhere and let the rest of us figure out health finance.

What makes the departure of health insurers critical right now is lawmakers’ utter lack of interest in their solvency.

The “moderate” Republicans, including Senate Majority Leader Mitch McConnell, now seem to be inclined to repeal parts of the ACA quickly, through a fast but complicated and limited process called budget reconciliation, and then replace the ACA later. 

Related: ‘Repealing’ Obamacare without repealing it

If the Republicans figure out a reasonably complete repeal-and-wait strategy that insurers believe protects their solvency: Great. Whether I like or dislike the new system, at least that approach to replacing ACA with “TrumpCare” would start out making apparent financial sense.

The replacement system might not end up working any better than the ACA system, but you pay your money and you takes your chances. If the Republicans at least make an honest effort to resolve the solvency problem, that’s all that can be expected.

If, on the other hand, Republicans go ahead with some kind of repeal-and-replace strategy that depends on the “replace” component to keep the health insurers solvent, and they have no idea when they’ll be able to get the replacement component through Congress: That’s not very nice.

The whole point of voting for Republicans is that, in theory, they’re supposed to be the party of people who listen to actuaries and accountants and make the machinery work. If Republicans are going to turn into the party of “Let’s hope!” when it comes to something as big and important as health insurer solvency, then we might as well have elected Jill Stein president. That way, we could joyfully pretend that everything is free, paid for by a big tax on the 1 percent (in the two weeks or so before everything collapsed and we ended up living in caves).

Republicans and Democrats may think they’ve been playing similar games of world chaos chicken by threatening to shut down the federal government, but that’s different. Most of us always believed that lawmakers would get brinksmanship out of their system and keep the United States in business. The various payment delays were mostly a nuisance, not a system destroyer.

But private organizations have payment deadlines they have to meet. They can’t just wave off 15 days, or six months, of chaos resulting from squabbles in Washington. They need the statutory and regulatory systems to be at least stable enough that they have some hope of knowing what they can sell, what claims will look like, and how they will get the cash to pay the claims.

The idea that Congress could seriously propose adopting a half-baked health system change program that leaves the individual commercial health insurance market, or other parts of the market, even less stable than it is today, based on promises that the rest of the health system change program is in the mail, is just absurd.

Playing that kind of game with the future of health insurers would be evidence that the United States is too drunk on partisanship to be a reliable counterparty. If that happens, the rating agencies should give up on pretending that the United States is serious about meeting its obligations, and downgrade our rating to “Bozo.”

If the health insurers are ever kind enough to come back to us, Congress should invite them to a nice breakfast and give them United States of America mugs, just to show them that they are collectively sorry they behaved so poorly, and hope to be more reliable in the future.

Allison Bell is a senior editor at LifeHealthPro.


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