As Republicans draft plans to dismantle Obamacare, insurers are planning their next move.
Republicans have hung their proverbial policy hats on the mantra to “repeal and replace” the Affordable Care Act, often referred to as Obamacare. Despite the party unity which drives this oft-repeated sentiment, it’s unclear exactly how the White House, Senate, and House of Representatives plan to follow through on their promise — and this fogginess could have serious consequences for health insurance markets nationwide.
Confusion Among the Ranks
Congressional Republicans have gone on the record to say that legislation to repeal the ACA could move forward as early as this spring, despite President Trump stating in an interview with Bill O’Reilly from Fox News that plans to roll out a replacement plan could spill over into 2018.
Even within Congress, Republicans are not all on the same page. Faced with pressure from insurance providers and the general insured public, GOP lawmakers have drafted a wide variety of plans to replace the current legislation. These plans are often fragmented and lack cohesion, however, and certainly do not appear ready to replace the ACA.
One thing is for certain: both the White House and GOP lawmakers object to the individual mandate, the Obamacare clause which requires all Americans to carry insurance or face a fine. President Trump wants to maintain certain aspects of the ACA — such as barring insurers from denying coverage to individuals based on preexisting conditions — while doing away with the individual mandate, which is what currently makes it possible for insurers to cover policyholders with preexisting conditions. According to CNN Money, “the mandate is key to bringing in younger, healthier enrollees, who can balance sicker, costlier consumers. Already, insurers are finding their participants are sicker than expected, which is among the reasons why they hiked premiums 22% for 2017.”
The confusion between Republican lawmakers and President Trump on the timeline for repealing and replacing Obamacare has left current insurers in a state of limbo regarding 2018 public policies. With no clear plan on what legislation will replace the ACA, current carriers do not want to commit to offering policies in 2018. Recent research from the Urban Institute shows that insurers would “seriously consider” withdrawing from the marketplace if Republicans repeal Obamacare without a replacement.
For instance, Aetna recently said they would not sell Obamacare policies again in states where they have pulled out, and they may even continue to shrink their participation. According to CEO Mark Bertolini, there simply isn’t enough time to develop plans and prices for new markets before 2018. “There is no possible way we’ll be prepared to do that, given the unclear nature of where regulation’s headed,” he said during a conference call.
Promoting Market Stability and Improved Coverage
Republicans find themselves in a difficult spot. On one hand, their constituencies are largely in favor of repealing the current legislation. At the same time, ACA enrollment was so high last year that the demand forced an extension for registration. This means that any proposed healthcare reform must ensure stability in the current market while also promoting the kind of long-term changes that would improve America’s current healthcare system. The industry’s main lobby group, America’s Health Insurance Plans, has offered to help Republicans craft policies that promote those two goals.
"Health insurance only works when everyone is covered: those who utilize insurance to obtain quality care, as well as those who are healthy but have insurance to protect them in case they get sick," they wrote in a letter to lawmakers in January. "Both types of consumers must be insured for coverage to remain affordable."
The future of healthcare in America remains uncertain. Therefore, until federal lawmakers put forth a clearer plan to replace the ACA, insurers will continue to proceed with caution.