The incoming Donald Trump administration and Republicans in Congress reportedly are rushing to repeal most of the Affordable Care Act within days of taking office, with a possible implementation delay of a year or two while they craft a replacement package.
They're also discussing quick administrative moves to unravel the ACA, such as terminating payments to insurers that compensate them for reducing cost-sharing requirements for lower-income exchange plan members.
But pro-ACA experts and some insurers warn that repealing the law without passing a replacement, combined with administrative actions undermining the law, could prompt health plans to abandon the individual insurance markets in 2018. That's because insurers have to calculate and submit their 2018 premiums by spring, and that task will be difficult or impossible if they don't know the rules of the new Republican-led system.
“I would not be surprised by a stampede to exit the market for fear of uncertainty and the strong potential for adverse selection,” Mike Kreidler, Washington state's insurance commissioner, said during a news conference organized by the liberal Center for American Progress. Kreidler, a Democrat, said he's already gotten calls from nervous insurance leaders and plans to meet soon with the CEOs of the three major insurers in his state, where half a million people have gotten coverage under the ACA.
Republican lawmakers and the Trump transition team reportedly are discussing the option of abolishing most of the law, including the premium subsidies and individual mandate, soon after Trump is inaugurated on Jan. 20, though they recognize it will take many months to draft an alternative. In addition, the Senate Republican Policy Committee issued a document saying regulatory changes could happen on the first day of Trump's presidency, Politico reported.
Dr. Mario Molina, CEO of Molina Healthcare, which operates exchange plans in nine states, said uncertainty about what Republicans will offer as a replacement makes it tough to set rates for 2018. “We need to know the rules so we know how to price products,” he said.
Kreidler predicted that if Republicans repeal the ACA without at the same time establishing a new system, the individual market could quickly collapse, which is what happened in his state in the late 1990s. At that time, all insurers withdrew from the individual market due to a state law that required them to accept all applicants without regard to pre-existing medical conditions, without requiring everyone to have insurance, and without offering premium subsidies.
The situation could be similar if the ACA's individual mandate and subsidies were abolished while the ban on insurers using pre-existing conditions were preserved. Congressional Republicans likely would not be able to repeal that pre-existing condition provision under the expedited budget reconciliation process they are considering for repealing most of the ACA.
The rapid administrative moves that Republicans reportedly are considering could do even more immediate damage to the individual market, experts say. For instance, stopping the cost-sharing reduction payments to insurers—which House Republicans are seeking to do in a pending federal lawsuit—would cost insurers hundreds of millions of dollars.
“If that subsidy goes away, it will definitely be a factor in our decision whether to stay in the marketplaces in 2018,” Molina said.
But Joseph Antos, a health policy expert at the conservative-leaning American Enterprise Institute, said GOP discussions of administrative moves to unravel the ACA may be mere bargaining chips to persuade insurers to offer plans under the eventual Republican-crafted reform model. “No politician can support a policy that would throw millions of Americans off insurance without recourse,” Antos said.
Chris Condeluci, who worked as a Senate Finance Committee staffer for Republicans during the ACA's drafting, advised GOP leaders to extend the ACA's unpopular individual mandate to shore up the insurance market until they are able to implement their replacement plan. “Then the Republicans could keep carriers in the game, and maybe that builds good will they can leverage as they develop a replace proposal, because they'll need carriers to be part of that exercise,” Condeluci said.
