Recently the Wall Street Journal published an article titled Highmark Sues U.S. Over Affordable Care Act, in which the insurer says it didn’t get nearly $223 million it was owed under the ACA’s ‘risk corridors’ program. To me, this heralds the logical end to an illogical program. Chickens really do come home to roost: health insurers that were either silent on the ACA or went along with it willingly are now looking for the inevitable handout. There has never been an insurance program that is run by the government that you could call successful. I can go back to the days of the Joint Underwriting Associations (JUA) that were set up by states to handle the uninsurable driver. Then there are the Children Health Insurance Plans (CHIP) that were run by states to, again, handle the uninsured problem. In each and every case the actuarial soundness of the program was ignored. All of these programs circled the drain. When the actuarial experience––the absolute quantified numbers––say that the insurer needs to increase rates, the politicians in charge deny reality and let the program slide, withholding the rate increases required to keep the program viable. After a little while, the program in question starts asking for money from whatever level of government created the mess, and the politicians can’t come up with the money. So the claim checks start to bounce, and no one gives a hoot—because the whole program was designed to make politicians feel good.
There are lessons to be learned from the ACA experiment. Chief among them is that no matter how noble, altruistic, and politically correct a government program can be for some problems, the solution usually lies somewhere other than in another bureaucratic initiative where the overriding philosophy is “the end justifies the means.” The history of the ACA, though currently incomplete, will show that the top-down, my-way-or-the-highway approach leads to animosity, failure, and ultimately back to square one. In point of fact, the number of uninsured—allegedly the problem that was to be solved—never changed under the ACA. Could this lawsuit be the demise of the Affordable Care Act?