After failing time and again to drum up enough votes to repeal Obamacare, Republican Senate leaders are now considering taking up a slimmed-down version of their repeal bill, which would preserve the subsidies to buy health insurance and the Medicaid expansion and most of the taxes that pay for it, but would ax the individual and employer mandate.
Insurers warned that if passed, such a "skinny bill" would disrupt the individual insurance market.
Ending the mandate would be catastrophic and "would lead to a death spiral in the individual market," CareFirst Blue Cross and Blue Shield President and CEO Chet Burrell said. "It is hard to think of anything more devastating, especially if nothing else is done to stabilize the health insurance market. The significant coverage gains we have made for Americans in recent years would be wiped away with this damaging blow."
CareFirst covers about 156,000 people on the individual market, both on and off Obamacare exchanges.
The organization that represents Blue Cross and Blue Shield affiliates also criticized the move.
The Blue Cross and Blue Shield Association said if there isn't going to be an individual mandate any more, "it is critical that any legislation include strong incentives for people to obtain health insurance and keep it year-round. A system that allows people to purchase coverage only when they need it drives up costs for everyone."
The statement didn't say what incentives might work, and no one from the organization agreed to an interview.
Senate Democrats asked the Congressional Budget Office to score a projected skinny ACA repeal bill that would repeal the mandates, medical device tax, defund Planned Parenthood, and repeal two ACA funds. The agency determined that Democrats' suggestion of the Republicans' path forward would lead to 16 million more uninsured individuals by 2021.
A senior Democratic aide said CBO said that premiums would increase by approximately 20% each year under the proposal.
The American Academy of Actuaries told senators in a letter that "ensuing the sustainability and stability of the markets should be front of mind" as they craft their ACA repeal legislation. The government needs to "enforce the individual mandate and support enrollment outreach" in order to achieve that, according to Cori Uccello, a senior health fellow at the academy.
But given that the individual mandate has not been strong enough to get everyone to buy insurance, one analyst said the impact might not be dramatic.
Deep Banerjee, a health insurance industry analyst with S&P Global, said since the mandate is already fairly weak, subsidies are more important to the individual market's health than the mandate.
"We want to make sure we don't want to over-emphasize this issue because the mandate is weak—that's very important to note. But a weak mandate is better than no mandate."
Nonetheless, Banerjee said insurers selling on the exchanges will increase premiums if the mandate goes away, because they will assume more healthy customers will drop out.
American Medical Association President Dr. David Barbe on Wednesday afternoon said eliminating the mandate "only exacerbates the affordability problem" critics say they're trying to address.
"Instead, it leads to adverse selection that would increase premiums and destabilize the individual market," he said.
Insurers have repeatedly called for ongoing cost-sharing reduction reimbursements to stabilize the market and said that reinsurance should be part of the solution.
Anthem, which covers 1 million people on the exchanges, warned Wednesday that the company could withdraw from more states where it currently sells plans if executives don't believe legislative and regulatory developments would reduce the level of uncertainty.
Anthem supported the first version of the Better Care Reconciliation Act, citing its reinsurance and cost-sharing premium support as well as the end of the tax on health insurers. Both in that announcement and on Wednesday's earnings call, the company was silent on the necessity of the individual mandate. Anthem CEO Joseph Swedish said the way the legislative process in Congress will play out "I think is anybody's guess, but quite frankly, we do believe we have the ability to share our opinions. Our voice is heard and we are hopeful that the kind of stabilization we believe is essential to best serve our marketplace is going to be embedded in whatever may come out of Congress."
The American Academy of Actuaries recommends that Congress should increase premium subsidies, extend eligibility for them or fund reinsurance. Any of those three approaches could lower premiums, the group said. Increasing subsidies or eligibility is unlikely with a Republican majority. However, reinsurance might return if the effort to pass an Obamacare repeal with only Republican votes fails in the Senate, and a bipartisan bill is later passed.
While providers would largely be unaffected by a "skinny repeal," they could still see a spike in uncompensated care if the compromise bill that comes out of conference contains Medicaid cuts, either by rolling back the Medicaid expansion or by shifting more responsibility for funding the program to states.
