Crony Capitalism is a Feature (Not a Bug) of Obamacare

David Harsanyi
Reason

So a giant, rent-seeking insurance company is accused of having threatened to leave Obamacare’s health insurance “marketplace” if the government didn’t approve its giant merger. If true, this would be the least surprising development in the past six years of Obamacare fiascos. Any giant regulatory scheme bringing together big business and big government inevitably leads to cronyism and corruption.

Not long after the Justice Department blocked Aetna’s merger with Humana, the company announced it would be scaling back participation in Affordable Care Act (ACA) exchanges. Now, Obamacare consumers in 11 states won’t be able to keep their insurance, even though, one imagines, they like their plans. But choices are getting scarcer by the year. Aetna is now one of about a dozen major insurance providers that have dropped completely out or scaled back participation in exchanges.

A recent Kaiser Family Foundation study estimates that 664 counties will only feature one single insurer on Obamacare exchanges in 2017. In 2016, it was 225. Four entire states will have only one Obamacare insurer. In one Arizona county, there may be none. Since Obamacare, in effect, solidified in-state insurance cartels, the exchanges are starting to look very much the same. But opening markets up across state (and national) lines is a silly idea, I bet.

At first, Aetna denied that its move was connected to the Justice Department’s merger decision. Even in the most generous reading, this turns out not to be exactly true. At The Huffington Post, Jonathan Cohn and Jeffery Young have gotten their hands on a letter from Aetna’s CEO that critics seem to believe catches Aetna threatening the administration.

The correspondence has gotten Democrats very agitated, even though their policies are creating the problem. Even before the letter was uncovered, Sen. Elizabeth Warren (D-Mass.) and others lamented the rise of corporate power rather than the convoluted regulatory environment that fosters an unhealthy relationship between business interests and government power. Warren said, “The health of the American people should not be used as bargaining chips to force the government to bend to one giant company’s will.”

To be honest, although I have little doubt Aetna was hoping its position on the exchanges would help with the merger, the letter sounds less like extortion and more like a sensible decision that any accountable executives would make when their company is facing losses. The real outrage isn’t that insurers like Aetna are abandoning Obamacare, but that companies like Aetna likely participated in Obamacare for cronyistic reasons to begin with.

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