ObamaCare anxiety grows for insurers

The Trump administration’s cancellation of ObamaCare ads is adding to the uncertainty facing insurers as they wait for congressional Republicans to repeal the law. 

Republicans have vowed a smooth transition away from ObamaCare and promised that no one now enrolled will lose coverage.

But the Trump administration’s decision to cancel television ads promoting enrollment is raising questions about how much support officials will provide for the system in the interim period before any repeal takes effect.

The final days of ObamaCare enrollment have always been a critical period for insurers, with young, healthy people often signing up at the last minute. Those young people help balance out older, sicker people and reduce costs for insurers. 

With outreach now scaled back, enrollment could fall short of targets this year. That possibility is adding to the anxiety of insurers, who might decide to drop out of the marketplaces in 2018, limiting choices and possibly leaving areas of the country with no ObamaCare options at all. 

“It’s a signal,” Joe Antos, a healthcare expert at the conservative American Enterprise Institute said of the ad cancellation. “Insurers would get a little more worried than they were. They’re not going to get help making the individual market work.” 

Yet HHS added Friday that it would continue some outreach, like email and Twitter messages, important avenues that are now not going away. But the administration says it is still canceling $4 million to $5 million in ads. An unspecified amount of those ads could not be cancelled and will continue to run, the administration said. 

Adding to the uncertainty for the healthcare system is the lack of a replacement plan from Republicans coming out of their retreat in Philadelphia this week. 

Some Republican lawmakers expressed concern about the path forward, according to leaked audio obtained by The Washington Post. “We’d better be sure that we’re prepared to live with the market we’ve created” with repeal, said Rep. Tom McClintock (R-Calif.), according to the Post. 

The clock is ticking for insurers to make plans for their participation in ObamaCare next year; they have to file their plans by early May. Uncertainty makes it hard for them to plan for next year, or decide whether to participate at all. 

Andy Slavitt, who was a top ObamaCare official under President Obama, tweeted Friday that he had met with an insurer who said it could not participate in 2018 given all of the unanswered questions about the law.

“Possibly the most significant implication of this action is what signal it sends to the insurance industry,” Larry Levitt, a healthcare expert at the Kaiser Family Foundation, wrote in an email, when asked about the ad cancellation.

“This seems like an Administration more interested in accelerating the demise of the [Affordable Care act] than in continuing to run it as effectively as possible. That will make insurers jittery about participating in the market in 2018, and if they do participate premiums may be higher given all the uncertainty.”

America’s Health Insurance Plans, the insurance trade group, expressed concern with the ad cancellations, though in restrained terms. 

“At a time when the individual market faces challenges, we need as many people as possible to participate — so that costs go down for everyone,” AHIP spokeswoman Kristine Grow said in a statement.  

The Trump administration cancelled about $5 million worth of a $75 million advertising budget, and said the money would be returned to the U.S. treasury.  

“We aren’t going to continue spending millions of taxpayers’ dollars promoting a failed government program,” an HHS spokesman said. 

Still, HHS said some outreach would continue, like Twitter messages, and employees would still answer calls and emails from consumers with questions. Tuesday is the final day of the enrollment period.

Democrats, though, reacted angrily, saying that there was no reason to cancel the ads other than sabotaging the healthcare law. 

“The Trump Administration’s outrageous decision tonight to sabotage Open Enrollment will mean coverage could cost more next year and insurers could drop out of the Marketplace,” Kevin Counihan, a top HHS official under President Obama, said in a statement Thursday night. “We know that more young people enroll during the final days of Open Enrollment, but they need to be reminded of the January 31 deadline.”

Up until the order, enrollment has been holding steady and even running slightly ahead of last year, despite the threat of repeal of the law. 

Republicans have been arguing ObamaCare is already collapsing in a “death spiral” as they push to repeal the law. Healthcare experts have disputed that assessment, despite real problems like premium hikes and a lack of insurer competition in some areas. 

Democrats said that President Trump would “own” the results if ObamaCare enrollment lags, premiums spike or insurers drop out.  

“They now own the consequences of their efforts to undermine the health care system,” said Leslie Dach, another former top Obama HHS official.