What will it take to avoid a market meltdown as the GOP dismantles Obamacare?

Health insurers are signaling they'll go along with Republicans' plans to repeal most of the Affordable Care Act—but only if new legislation includes a strong substitute for the ACA provision encouraging younger and healthier people to buy coverage.

It's highly uncertain, both procedurally and politically, that GOP leaders can quickly pass such a provision. That is widely viewed as necessary to avoid a chaotic meltdown in the individual insurance market where nearly 20 million Americans get coverage.

In spite of the uncertain future of the exchanges, sign-ups in the open enrollment period that started Nov. 1 are outpacing last year's numbers, according to the Obama administration. More than 1.6 million Americans had renewed their coverage by the end of November, and another half million consumers who are new to the marketplaces selected plans.

GOP leaders have announced plans to abolish most of the ACA as early as next month through an expedited budget reconciliation bill requiring just 51 votes in the Senate. The legislation would delay much of the impact for two or three years to allow Congress to craft and pass a replacement plan, but Republicans have signaled they are inclined to nix the mandate immediately.

Some of the ACA replacement proposals floated by Republicans outline measures that would require people to maintain unbroken coverage to avoid higher premiums and loss of coverage for pre-existing conditions.

America's Health Insurance Plans, the industry's largest lobbying group, said one of its key conditions for accepting the elimination of the ACA's so-called individual mandate is the creation of strong incentives for people to maintain continuous coverage. Otherwise, they warn, healthier consumers will drop insurance; sicker people will stay in; costs and premiums will shoot up; and insurers will abandon the individual market in 2018.

As examples of policies that could compensate for the loss of the mandate, AHIP pointed to Medicare rules imposing higher premiums on seniors who wait to sign up for Part B, Part D and Medigap coverage. AHIP also mentioned waiting periods or penalties for people who have had a break in private coverage.

But it's not clear that Senate rules would allow new requirements for continuous coverage as part of a budget reconciliation bill, which can only include provisions with a direct impact on the federal budget and that do not raise spending.

If Republicans can't get the coverage rules into a reconciliation bill, they would have to pass them in separate legislation requiring 60 votes to overcome a likely Senate Democratic filibuster. That means they would have to get Democratic support, and Senate Democratic leader Chuck Schumer has said his caucus will not take part in any GOP effort to repeal the ACA without replacing it.

“Democrats will not go along with continuous coverage as an alternative,” said Tom Daschle, the former Democratic Senate majority leader who worked with the Obama administration in crafting the ACA. “Continuous coverage doesn't solve the longer-term problems of good actuarial balance or other issues that repeal of the mandate will generate.”

Insurers will need to know the operating environment soon because they have to calculate and submit their 2018 premiums by spring, though the incoming Trump administration may be able to delay the filing deadline by several months. In addition to passing a continuous coverage rule, Marilyn Tavenner, AHIP's CEO, said during Modern Healthcare's 2016 Leadership Symposium last week that the Republican Congress needs to do several other things to keep her members in the market in 2018 and avoid disrupting coverage for millions of people.

The most immediate need to avoid a market collapse, she said, is that lawmakers must appropriate funding for payments to health plans to cover their expenses in reducing low-income members' cost-sharing responsibilities. She said maintaining the ACA's Medicaid expansion to low-income adults is also important. Experts say having Medicaid cover these low-income people with costly medical needs makes the individual market more financially viable for insurers.

Tavenner also wrote in an op-ed column that to keep insurers in the market, Republicans need to preserve premium subsidies for low- and moderate-income people to make coverage affordable; fund risk-protection payments to insurers that sign up sicker people; and eliminate the ACA's health insurance premium tax.

Health insurers have been reluctant to commit to offering individual-market plans in 2018 based on possible scenarios of the Republicans' transition rules. “It's premature. The ACA has a lot of variables that all work together,” said Scott Armstrong, CEO of Seattle-based Group Health Cooperative. “It would be difficult to put together a list of those requirements if I don't know what's going to be missing.”

Some insurance leaders would like to see Republicans keep the ACA's individual mandate, which they see as the most effective method of ensuring that insurers get an adequate number of healthier enrollees to offset the costs of sicker members. “The strongest way to balance the risk pool is to have a requirement for coverage,” said Karen Ignagni, CEO of New York-based EmblemHealth and former CEO of AHIP. “Can you construct other systems? It all depends on the design of a continuous coverage approach.”

But it would be very tough politically for President-elect Donald Trump and congressional GOP leaders to even temporarily keep the individual mandate because it's the most unpopular part of the law for them and their voters. While large majorities of Americans, including Republicans, support key ACA provisions—such as the premium subsidies, Medicaid expansion and barring insurers from denying coverage based on a person's medical history—most people do not favor the mandate, according to a recent Kaiser Family Foundation poll.

It's possible Democrats could be persuaded to help pass continuous coverage rules to prevent the market from unraveling and masses of people losing coverage, said G. William Hoagland, a former senior staffer for Senate Republicans and currently a senior vice president at the Bipartisan Policy Center.

“Democrats could sit back and say, 'You broke it, you own it; take the consequences,' ” Hoagland said. But if Democrats don't vote for the coverage rules, Republicans would blame them for the disruption, he said. “This is high-stakes politics.”