Obamacare repeal plan stokes fears of market collapse – Politico

 In Business

Republicans warned for years that Obamacare would blow up the nation’s individual insurance market. Instead, their own rush to repeal the health care law may be what triggers that death spiral.

GOP lawmakers say they plan to repeal the Affordable Care Act as soon as President-elect Donald Trump takes office, including a transition period of a year or two before it takes effect. That way, they satisfy their base while giving notice to 20 million Obamacare customers that they must find other coverage options.

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But repealing the law without a replacement is likely to spook health insurers, who might bolt from the markets prematurely to avoid losses as some people stop paying their premiums, while others rush to have expensive medical procedures before losing coverage. Insurers would have little incentive to stick around without knowing know what to expect at the end of the transition. And that could spell chaos for consumers.

“The discussion right now about repeal and replacement is making the market very, very nervous,” said Washington Insurance Commissioner Mike Kreidler, a Democrat. “I would not be surprised to see the potential for a stampede to exit the market.”

Even if Congress delays immediate action to kill the health care law, Obamacare insurers would have just a few months to decide whether to stay in the law’s marketplaces for 2018. Deep uncertainty about the Republicans’ Obamacare replacement could drive out those companies, cutting off insurance for potentially millions of customers.

“A repeal that kicks the can on replace would put the market in serious jeopardy and the American people will hold them accountable for the results,” Topher Spiro, who heads health policy at the left-leaning Center for American Progress, said on a call with Obamacare supporters this week.

Uncertainty about Obamacare’s future is occurring against the backdrop of strong demand for coverage. More than 1 million people signed up through HealthCare.gov in the first two weeks of the current enrollment season, including 100,000 who enrolled the day after the election, according to the Department of Health and Human Services. The administration projects that 13.8 million people will participate this season, which ends about two weeks after Trump takes office. Millions more — including young adults on their parent’s policies and those in expanded Medicaid — will also get coverage this cycle.

“Health care and health insurance is an area where the devil really is in the details,” said Mario Molina, CEO of Molina Healthcare, which is selling exchange plans in nine states. “It’s a big, big issue and if you get it wrong it can harm a lot of people.”

Republicans have struggled for six-plus years to agree on an Obamacare alternative. Insurers, to remain in the individual market, would have to bet that the GOP successfully passes new health care legislation in a fraction of that time.

“It would be critically important to have sufficient transition time, and I doubt that one year is enough,” said Alliance of Community Health Plans CEO Ceci Connolly. “It’s enormously important for the incoming administration and Congress to be very clear about their intentions, because the worst thing for business is uncertainty.”

Republicans say they plan to repeal Obamacare through reconciliation, a budget process that requires just 51 Senate votes and guarantees that Democrats can’t stand in the way. But the GOP can’t eliminate the entire law through reconciliation — just the parts tied to federal funding.

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