Major insurers say they could adjust to a major upheaval in the health care markets if Republicans make good on their pledge to simultaneously repeal and replace the Affordable Care Act with a plausible new plan.
But if Republicans fail to develop a replacement plan in timely fashion – which increasingly appears to be the case – then insurers will either bail out of the individual health insurance market in 2018 or jack up premiums by as much as 15 percent to 20 percent.
These are some of the findings of a new survey of 13 health insurance companies in 28 states conducted by Georgetown University’s Center on Health Insurance reforms and funded by the Urban Institute and the Robert Wood Johnson Foundation.
The insurance companies generally agreed that a repeal and delay strategy – in which Congress votes to dismantle key portions of Obamacare effective at a future date without a concurrent replacement -- would destabilize the individual insurance market.
Insurers told researchers that without a replacement plan, premium increases next year could range as high as 20 percent – similar to the average premium increases for 2017 that were widely mocked by Republican critics and cited as a reason for dismantling Obamacare.
In particular, the individual market would likely be destabilized if Congress eliminates Obamacare premium subsidies for lower income Americans, the individual mandate targeted at forcing younger people to sign up for insurance, and federal cost-sharing to protect insurance companies from significant financial losses.
“With 13.8 million people projected to enroll in marketplace plans in 2017, the uncertain future of the ACA is of concern to the insurance industry,” Sabrina Corlette, a research professor at Georgetown University who took part in the study, said in a statement Friday. “While insurers are confident they can adjust to new regulations given enough transition time between the ACA and its replacement, a lack of clarity from policymakers could mean that consumers will lose coverage or face dramatically higher premiums.”
While a substantial transition or buffer period to adjust to new GOP regulations would be helpful, the insurers said, there was no consensus on how long such a period should be.
The study comes as congressional Republicans wound up a three-day policy retreat in Philadelphia in which party leaders mapped out timelines for action this year for replacing a four-year old program that insures more than 20 million Americans, but without providing clarity on how they would do that.
House Speaker Paul Ryan (R-WI) and Senate Majority Leader Mitch McConnell (R-KY) outlined a schedule calling for the Republican controlled Congress to wrap up work on simultaneous repeal and replace legislation no later than the first 200 days of the new Congress and Trump administration.
Yet the Republicans just missed a January 27 deadline for the House and Senate Budget Committees to assemble repeal legislation and present it to members for action. That has now been put off until late March, raising suspicions that the repeal and replace campaign might be losing a little steam.
James Wallner, a vice president for research at the conservative Heritage Foundation, wrote in the Daily Signal that while the Jan. 27 deadline was not binding, “The fact that congressional Republicans are unable to meet this deadline suggests that they may be less committed to repealing Obamacare than previously expected.”
What’s more, if rank-and-file Republicans were hoping for a detailed description of what the GOP replacement plan will look like, they were in for a disappointment. Rep. Pete Sessions (R-TX) told reporters at the start of the retreat on Wednesday that lawmakers were clamoring for “exact, specific and detailed” information.
“We’re going to own this stuff and we better be able to explain it,” he said, suggesting that he and other lawmakers are beginning to feel heat from constituents fearful of losing their coverage.
Instead, they received fragmented descriptions of key elements of the GOP approach, including a system of refundable tax credits based on age to help cover premium costs, state-based high risk pools to subsidize the coverage of the oldest and sickest patients, and tax-exempt health care savings accounts.
During his 25-minute address to the Republicans yesterday, Trump once again denounced Obamacare as “a disaster.” But he didn’t discuss his own ideas for a replacement, after boasting a week and a half ago that he was on the verge of unveiling his own plan for providing insurance “for everybody” with more choices and at a lower cost than under Obamacare.
Rep. Greg Walden (R-OR), chair of the House Energy and Commerce Committee and one of the architects of the Republicans’ emerging health care plan, cautioned that repeal and replacement of Obamacare would be handled piecemeal because of restrictions under House and Senate rules. That means that some of the initiatives would be handled as part of a special, filibuster-proof budget resolution pending in the two chambers, with the rest handled later this year through a more traditional legislative process.
“Those who think we’re going to suddenly appear with a 2,000-page replacement bill are mistaken,” Walden told The Washington Post Thursday.
Meeting behind closed doors in Philadelphia on Thursday, a number of Republican House and Senate members voiced sharp concerns about the consequences of their party’s quick push to repeal Obamacare, according to a recording of the session obtained by The Washington Post.
“We’d better be sure that we’re prepared to live with the market we’ve created” with repeal, said Rep. Tom McClintock (R-CA), according to the recording. “That’s going to be called Trumpcare. Republicans will own that lock, stock and barrel, and we’ll be judged in the election less than two years away.”
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