Insurers face big choice on staying in ObamaCare

While President Trump touts his prediction that ObamaCare will soon “explode,” insurers are making decisions about whether to participate in the law’s marketplaces in 2018. 

Insurers have about six weeks to finalize their plans and rates or to decide to leave the marketplace altogether as they await word from Trump and Congress about the future of insurer payments created under the Affordable Care Act.

The president, however, is signaling that he has little interest in taking steps to keep insurers from dropping out of ObamaCare.

{mosads}“I’ve been saying for the last year and a half that the best thing we could do, politically speaking, is let ObamaCare explode. It’s exploding right now,” Trump said Friday after House Republicans pulled their repeal legislation from the floor.

That message is worrisome for insurers.

“That’s certainly not a good thing to hear,” said Cynthia Cox, healthcare policy expert with the Kaiser Family Foundation.

“It’s not sending them the message that the Trump administration is going to try to stabilize the market. ObamaCare, as a whole, or the marketplaces, as a whole, are not going to explode on their own. To hear the Trump administration say it’s going to explode may suggest they’re going to take some action to weaken the market.”

Many insurers have fled the individual market in recent years, citing financial losses and pools of enrollees that skewed toward sicker people. Most recently, Humana announced in January that it would not participate in the exchanges in 2018.

Insurers have signaled they are more likely to stay in ObamaCare if the Trump administration continues with cost-sharing subsidies and other payments. Those payments help offset the costs of covering low-income people and people with costly medical conditions.

If insurers don’t get those payments, they could decide to leave the individual market in 2018 or raise premiums substantially. 

“We’re a little bit puzzled and confused because we’ve heard so much talk in recent weeks about ‘covering everyone’ and taking care of everyone and taking care of working families,” said Ceci Connolly, president and CEO of the Alliance of Community Health Plans (ACHP).

“If you upend this individual market, you’re really just doing a lot of harm and causing enormous disruptions for these families.”

Connolly said it could be difficult for the nonprofit community plans and insurers that ACHP represents to remain in the individual market unless the administration continues the ObamaCare payments.

“They can only absorb a certain level of losses or they’ll be insolvent and won’t do anyone any good,” she said.

“Each have to sit down and make a real business decision on whether or not they can afford to do this. … Every single plan is going to have to make some very difficult decisions in the next couple of months.”

Big insurers like UnitedHealth Group and Aetna have mostly left the individual market over the years, citing financial reasons. Several counties across the country only have one insurer offering ObamaCare plans.

Now Molina Healthcare is signaling it may downsize its presence in the market, or pull out altogether, if Congress or the administration doesn’t act to stabilize it. Molina has 1 million exchange enrollees in nine states this year. 

“We need some clarity on what’s going to happen with cost-sharing reductions and understand how they’re going to apply the mandate,” said Molina CEO Dr. Mario Molina. 

Asked if Molina would leave ObamaCare if the payments are stopped, the CEO said: “It would certainly play into our decision. We’ll look at this on a market-by-market basis. We could leave some. We could leave all.”

Insurers are also worried about what the new administration and Congress plan to do with ObamaCare’s individual mandate, which requires everyone to either have insurance or pay a fine.

The administration could decide not to enforce the fine and the Department of Health and Human Services could grant more hardship waivers to people, effectively gutting the policy.

If people are no longer required to have insurance, healthy people would likely drop out of the marketplace, leaving sicker, more costly people in and causing premiums to rise and insurers to lose money. 

There’s more uncertainty on the horizon as Republican leadership signaled Tuesday it would continue working toward repealing ObamaCare after seemingly abandoning the effort last week.

Speaker Paul Ryan (R-Wis.) acknowledged the deadlines insurers are facing but that he wouldn’t put a timeline on repealing ObamaCare, which would be done through reconciliation as a way to avoid a Democratic filibuster in the Senate.

But insurers say it’s time for the two parties to work together on healthcare. 

“I think now is the time for Republicans and Democrats to get together and begin having a dialogue about what can be done to stabilize healthcare both in Medicaid and the marketplace going forward,” Molina said.

“It’s time to stop playing partisan politics and time to get practical.”