Insurers may be forced to leave Obamacare markets or dramatically increase premiums if they don’t get answers soon on Republican plans to either repeal or modify the law, industry groups and experts say.
Insurers could only watch as Republicans moved to repeal Obamacare, then abandoned that effort, and then said this week they want to try again in the next few months. That uncertainty is making it almost impossible for insurers to predict the state of the law in the short term, even as they have to quickly decide how engaged they’ll be in the Obamacare marketplaces.
The uncertainty is also leading Democrats to argue that any upheaval in the market caused by shifting Republican plans should be blamed on Republicans and President Trump, who has already said that maybe the best thing to do is to let Obamacare “explode” on its own.
The fate of millions of people’s healthcare “really now lies in the hands of the Trump administration,” said Rep. Rosa DeLauro, R-Conn., during a House budget hearing Wednesday featuring Health and Human Services Secretary Tom Price.
The biggest question insurers need answered soon is how cost-sharing reduction payments will work under the law this year. Insurers are currently required to lower copays and deductibles for certain low-income Obamacare customers, after which the government reimburses them.
But insurers don’t know if those payments, which were the focus of a House lawsuit, are going to continue under Trump.
“If we don’t know if those supports are going to be in place, then it is nearly impossible to come up with a good [plan] price,” said Ceci Connolly, president and CEO of the Alliance of Community Health Plans, which represents smaller nonprofit plans.
The insurance industry’s main lobbying group, America’s Health Insurance Plans, is also worried about the lack of guidance on cost-sharing payments.
If the administration stops making payments, that could cause insurers to either flee the individual markets or raise premiums to compensate because they still have to lower copays and deductibles for certain customers, said Cynthia Cox, a health insurance expert with the nonpartisan Kaiser Family Foundation.
“If that happens suddenly in this year, then we could see insurers leaving the market immediately,” Cox said. “That is going to be an urgent situation that will demand action from Congress.”
She isn’t sure who would get blamed in that situation — Trump, Republicans or Democrats. But Democrats are trying to do all they can to ensure it is Republicans and Trump get the blame.
“We will call out any attempt by your department to undermine Americans’ health coverage,” said Rep. Nita Lowey, D-N.Y., told Price at the hearing. “I hope you are not inclined to seek a death by a thousand cuts approach to decimate the [Affordable Care Act].”
Republicans have said that the law is already failing, and point to major insurers that have already left a majority of their marketplaces and high premiums for 2018.
But if Price is going to provide the payments, he needs to tell insurers by late May, as they face a June deadline to submit their rates for 2018 Obamacare plans.
HHS told the Washington Examiner that it couldn’t comment on the payments because they are the focus of a lawsuit. Price also refused to comment when asked by House Democrats Wednesday.
The House sued the Obama administration over whether the cost-sharing reduction payments need a congressional appropriation. The administration argued they didn’t, but a federal judge ruled in favor of the House, which said an appropriation is needed.
That ruling was on appeal, but it remains unclear if the Trump administration will drop that appeal and let the ruling stand. A status meeting is scheduled for May 22 on the lawsuit.
If the ruling stands, that doesn’t kill the cost-sharing reduction payments. It just means that Congress would have to appropriate the funding, but that again raises the question of whether the Republican-controlled Congress would take that step.
Another uncertainty facing insurers is what exactly Republicans will do on Obamacare repeal. After the repeal bill was pulled Friday because of a lack of votes from conservative House Freedom Caucus members and moderates, House leadership and the White House signaled they will move on to tax reform.
But earlier this week, Republicans have hinted at going another round at Obamacare repeal, and conservatives hope to bring the bill back up in April or May.
Rep. Mark Meadows, R-N.C., the leader of the Freedom Caucus, told the Washington Examiner Tuesday that he doesn’t want to interfere with any markets. However, he believes the new repeal debate won’t impact insurers for the 2018 coverage year.
“They don’t write their new policies until next March,” he said. “For us to have this debate whether it is a week, two weeks or three weeks from now, it doesn’t affect the bills that come out this fall.”
