The Republican congressional leadership has made a new timetable for gutting the Affordable Care Act, aiming to get legislation done by March or possibly April.
But that doesn’t give insurers much time to meet their first deadline for submitting plans for 2018 on the individual market, which includes the law’s exchanges.
A rule published four days before President Trump took office set the deadlines for insurers to sell health plans on the individual market, which is for people who don’t get insurance through their jobs. Democrats have charged that Republicans will throw the market into chaos by repealing the law without an alternative, with Republicans responding that the markets are already in turmoil.
Four House and Senate committees are drafting legislation that can be passed in the Senate via reconciliation, which lets a bill be passed with a 51-vote majority instead of 60 that breaks a filibuster. House Speaker Paul Ryan said last week he hopes to get the bill approved in the House by March or April.
However, even if the bill is done by March, that is close to the first deadline for putting together plans for the 2018 individual market.
Insurers have to submit their initial plan applications between April 5 and May 3. Any plan on the market has to be approved by the federal government and must meet requirements including offering certain benefits and guaranteeing coverage for people with pre-existing conditions.
After that, the Centers for Medicare and Medicaid Services, which oversees the law’s exchanges, looks over the applications. It works with insurers to make any corrections.
In August, insurers must submit their planned rates and publicly post any increases more than 10 percent. Insurers then negotiate with the insurance commissioner of the state where they are selling their plans. Insurers have to finalize all plans in September, and open enrollment begins Nov. 1 and ends Jan. 31.
The timeline means that insurers are deciding now whether they want to participate in the 2018 individual market, one expert said.
“They are really running up against the clock now,” said Cynthia Cox, an associate director with the nonpartisan Kaiser Family Foundation.
Cox said insurers could assume there will be no substantial changes for 2018 and could be crafting plans based on how enrollment is shaping up now. Open enrollment for 2017 ends Tuesday at midnight.
However, much depends on what specifically Republicans will do. Currently the GOP plans to gut the law’s mandates and taxes but create a transition period of a few years until an alternative is put in place.
A major factor will be what exactly is stripped out of Obamacare and when, Cox said.
A reconciliation bill can be used only for spending and budget matters. Congress passed a reconciliation bill in 2015 that killed Obamacare’s individual and employer mandates and the law’s taxes but left in place the law’s regulations on insurance plans. Former President Barack Obama vetoed it.
The committees haven’t announced the reconciliation language yet.
House Speaker Paul Ryan’s office did not return a request for comment on the timeline.
Cox said the fate of the mandate could play a major part in the stability of the 2018 individual market both on and off Obamacare’s exchanges. Insurers that offer plans off the exchanges have to meet the same insurance regulations, with the only difference being customers on the exchanges receive subsidies to help pay for the cost of insurance.
If the individual mandate, which forces everyone to get insurance, is repealed, then “there is little incentive for insurers to continue participating in this market,” Cox said.
While insurers have to start submitting their plans in April, they can withdraw them since the deadline to finalize plans is in September.
Some experts have doubted that the individual mandate has played as big a part in the individual market.
“The penalties for failing to comply with the mandate also are rather modest in proportion to the likely average premium cost of required coverage,” said Tom Miller, a scholar at the right-leaning think tank American Enterprise Institute, in testimony before the House Ways and Means Committee last week.
Miller said compliance with the mandate has been weak, pointing to 12.7 million individuals being exempt from the mandate in 2015. That figure is up only slightly from the 12 million in 2014.
The Internal Revenue Service collected $1.5 billion in individual mandate revenue in 2014 and $1.7 billion in 2015, he added.
Cox said the mandate and the law’s subsidies have led to many people gaining insurance.
“On the one hand, reasonable people could argue the individual mandate didn’t go far enough or the subsidies didn’t go far enough,” she said. “But those two things in combination with each other did lead to many people gaining insurance who didn’t have it before.”
