Health care premiums will go up next year unless Obamacare is fixed, Aetna CEO says
As the future of Obamacare enters the national spotlight under president-elect Donald Trump, health-care premiums will go up next year unless the system is fixed, Aetna CEO Mark Bertolini said Thursday.
"Most Americans hate their insurance and they hate the health-care system. It's unaffordable and it needs to be fixed," he said. "You can't put [people] out on the street without insurance."
Bertolini spoke at the DealBook Conference in New York City, hosted by CNBC anchor and New York Times columnist Andrew Ross Sorkin and the editors of the newspaper. The conference focuses on "playing for the long term" in a business environment that's shackled to quarterly returns and compressed news cycles.
Bertolini's remarks came amid a U.S. election where health insurance has become a central issue. Trump, alongside many congressional Republicans, have called for repealing and replacing Obamacare.
The Affordable Care Act was built on a flawed model that required getting as many people as possible into the insurance system, Bertolini said. And he said he thinks the Republican Party will make good on its promise to repeal it.
"There will be a repeal first, and I think the repeal will be at a minimum in name," Bertolini said. "Because what's going to happen in the next year, we have people signed up, we have to honor that through 2017. We'll have to work quickly to have something for 2018."
The current health-care exchange mostly serves middle-aged people with pre-existing conditions, Bertolini said. If the Affordable Care Act is repealed, those people will need the support of Medicare but are too young.
Bertolini said some of those benefits should come down to ages like 55. Meanwhile, by changing the funding system of Medicaid expansion into a block grant to the states, it would be "fairly simple" to solve those gaps left by an ACA repeal.
"I can say with a lot of conviction and data that MedicareAdvantage, in the end analysis, is a lot cheaper and provides better care," Bertolini said. "So if we're looking for a way to make entitlements work around the promises we've made to seniors, we need to make that program more robust."
But Bertolini said he's unsure of exactly what Aetna's approach will be, because he didn't anticipate Trump's election.
"If you were to look at our game board of all the possible outcomes of the election, this one wasn't even on the sheet," Bertolini said. "We started with a fresh piece of paper yesterday. We had no idea how to approach it. We literally had to build out what would have taken us months if we thought it was possible."
As chief of one of the nation's largest insurers, Bertolini has been outspoken about the "broken" U.S. health-care system.
"If we were to design [the system] over, I would suggest we design it with a definition of the best outcome being a productive individual," Bertolini told Institutional Investor last year.
While the American system is unaffordable, much of that is also due to underlying heath-care costs and inequality, he said. Bertolini said that factors like poverty – "your ZIP code" — can cause unequal access to good health care. He said technology and the gig economy can help.
"What we should be doing in the future is bringing health care into your home, versus bringing to you in the medical industrial complex," he said. "If you end up in the hospital, we've failed."