EDITORIAL: Finding out what’s in it

As the tumors within Obamacare continue to metastasize, the Democrats responsible for foisting the law on American consumers now point their fingers at a familiar bogeyman: evil insurance companies.

Aetna recently announced it would no longer offer policies on 11 of the 15 state exchanges where it sells health insurance. The company said it had lost $200 million on such products during the second quarter. Other insurers have suffered similar red ink.

But economic realities be damned. Progressives who have never operated a lemonade stand but seek to micromanage the U.S. economy now argue that the shady capitalists at Aetna are simply trying to punish the president for blocking the company’s proposed deal to gobble up Humana.

This is amusing on a number of levels, not the least of which is that Aetna executives in 2009 captained the Obamacare cheerleading squad, gambling that the law would force millions of healthy young adults into the market and boost profits. In fact, the opposite happened. Total enrollment is half of what the administration promised and most of those signing up to buy insurance are ailing.

Perhaps that’s a cautionary tale to corporate bigwigs who play footsie with the regulatory state.

In fact, the law itself purposely provides incentives for insurers to consolidate. Writing last week in U.S. News and World Report, Jeffrey A. Singer pointed out that the authors of the Affordable Care Act “were convinced that consolidation in health care would lead to decreased health care spending by eliminating duplication, standardizing treatment protocols and incentivizing better utilization.”

So why is the administration now throwing up roadblocks to such mergers in the first place?

Finally, as Greg Ip of The Wall Street Journal noted Thursday, the issues with Obamacare are intrinsic to the law. And its many problems have everything to do with the distortions inherent in central planning, not the misconduct of health insurance executives.

“By incentivizing insurers to misprice risk, the law has created an unstable dynamic,” Mr. Ip argues. “Insurers can no longer charge or exclude coverage for pre-existing conditions, charge men and women different rates or charge older customers more than three times as much as the young.” The law thus “distorts how insurance is priced.”

In a quote for the ages, Nancy Pelosi famously said of Obamacare, “We have to pass the bill so that you can find out what is in it.” Now that we’re finding out, it isn’t pretty.