Obamacare looks like it’s going away. Until that happens, big health insurers aren’t sure what to do with it.
Republicans and President Donald Trump haven’t given details on how they’ll repeal and replace the Affordable Care Act. Uncertainty about the law, which covers millions of Americans, has left companies trying to figure out if they’re better off stuck in limbo or just quitting entirely.
On Tuesday, Aetna Inc. fired a warning shot, saying it won’t start selling Obamacare plans again in the states where it has pulled out, and may continue shrinking its participation. There’s not enough time to develop plans and prices for new markets before next year, Chief Executive Officer Mark Bertolini said.
“There is no possible way we’ll be prepared to do that, given the unclear nature of where regulation’s headed,” he said on a conference call with analysts.
Congressional Republicans face a dilemma, too. They want to paint Obamacare as collapsing to help justify its repeal. Yet they need to keep its markets humming this year, and probably into 2018, or take the blame for millions of people who might lose coverage. That will be the topic of hearings Wednesday in the Senate and Thursday in the House.
“The amount of uncertainty right now is quite problematic,” said Karen Ignagni, CEO of EmblemHealth, a nonprofit insurer in New York. “There’s a lot of chatter, but there’s not a lot we know.”
Insurers also have their eyes on Trump for signs of whether his administration will stabilize markets or undermine them. So far, the record is mixed. Trump signed an executive order directing agencies to minimize Obamacare’s burdens, though it’s not clear what actions they’ll take. And the Department of Health and Human Services briefly halted efforts to encourage people to sign up for ACA health plans, before resuming them.
Some insurers, including Centene Corp., have fared well with Obamacare. CEO Michael Neidorff says the company will keep offering coverage, as long as the markets don’t look markedly worse come September or October.
“It’s business as usual, until we hear otherwise,” he said. “We just take calculated risks, and on this one, they’re not going to leave 20 million people uninsured.”
However, most of the industry will face challenges to stay in Obamacare marketplaces. Plans must be filed with state and federal official starting in April. Republicans are saying their proposals for Obamacare replacements may come the same month, if not later, and insurers may not have the information they need to participate.
Representative Steny Hoyer of Maryland, the No. 2 House Democrat, accused Republicans on Tuesday of sowing crippling doubts about the health law.
“They create a lack of confidence and then they point and say, ‘See, the ACA is failing,'” Hoyer said. “The chaos and uncertainty that this administration has created over the last 10 days has led to the very thing that they say is the problem.”
While the industry’s main lobby group, America’s Health Insurance Plans, hasn’t defended the ACA, it has offered to help Republicans craft replacement plans “that deliver both short-term stability and long-term improvement.” Marilyn Tavenner, the group’s CEO and a former top Obamacare official, is scheduled to testify Wednesday in Washington.
“We know how health insurance truly works, and what doesn’t work,” AHIP said in a December memo outlining its views. “We know which rules are effective — and which rules simply create red tape.”
Congressional Republicans have proposed four amendments to shore up Obamacare, which will be discussed Thursday. One change would allow insurers to charge older people more while lowering costs for young people to buy plans. Another would tighten rules for buying coverage outside normal enrollment periods.
Knowing the Rules
“This is a repair element, which provides some interim relief to the huge premium increases that insurance buyers have faced,” said Representative Bill Flores, a Texas Republican who proposed one of the tweaks. “These should become a permanent part of the replacement moving forward.”
A group of researchers at Georgetown University interviewed 13 insurers operating in 28 states to learn how they’re planning for an Obamacare repeal. Sabrina Corlette, the lead author, said companies are frustrated.
“They just need to know what the rules are,” said Corlette, a research professor at the school.
AHIP said subsidies to help people buy insurance should continue at least this year, as should the expansion of Medicaid, a program that covers the poor and disabled. The group also wants promised payments to health insurers, such as for cost-sharing reductions and the law’s reinsurance program, to continue. A tax on health insurers, already suspended for this year, should be repealed permanently, AHIP said.
Mario Molina, the CEO of Molina Healthcare Inc., which also largely offers Medicaid plans and Obamacare plans tailored to lower-income individuals, said he’s skeptical of some of the fixes he’s seen so far, particularly the emphasis on health-savings accounts paired with health plans with high deductibles.
“I don’t think those things, as much as the Republicans like them, are going to be as popular as they think with low-income people,” he said. “Right now, people hate these high-deductible plans.”
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