It isn’t just the nearly 14 million consumers that are worried about what might happen to their health insurance if Obamacare is repealed but not soon replaced.
In the report the Georgetown Center says it talked in-depth with 13 large health insurers, although it didn’t say which ones.
It will be business as usual in 2017 for many health insurers serving consumers who comparison shopped and bought insurance online at Healthcare.gov or other public exchanges. But 2018 would be a different story. “Insurers reported they would ‘seriously consider’ a market withdrawal in 2018 if the mandate is repealed without an effective replacement,” the report says. “Insurers reported that at a minimum, their premiums would need to increase in 2018 to reflect the likelihood of a sicker risk pool.”
The insurers told the Georgetown Center they can deal with an overhaul of healthcare insurance if there is sufficient time to study any final legislation and make changes to health insurance. But if the Trump administration and Congress don’t soon have a new plan to put in place of Obamacare there would be market disruption. “A ‘repeal and delay’ strategy without a concurrent replacement for the Affordable Care Act (ACA) would destabilize the individual market,” the report says. “Although insurers saw value in a buffer period to adjust to a new regulatory structure and educate consumers about changes, they perceived ‘significant’ downside risk in remaining in the marketplaces while the details of an ACA replacement are in doubt.”
One possibility that particularly concerns insurers is that Congress will eliminate the current mandate for uninsured consumers to buy health insurance or face a financial penalty, the report says. “Respondents noted that the individual mandate is a key part of an interlocking set of policies designed to ensure a viable risk pool in the reformed individual market,” the report says. “Most expressed that at a minimum, repealing this incentive to remain in coverage would be an additional blow to a marketplace that has had difficulty finding its footing and would lead to higher premium rates.”
Removing the individual mandate would push many insurers to withdraw further or altogether from the public exchange market. “One insurer stated, ‘We have in our state a market that is hanging on by a lifeline, and if you remove the individual mandate, that in and of itself is like the last nail in the coffin, but it is not in and of itself going to dramatically change things at least in 2017,’” the report says.
The uncertainty could result in health insurance premiums rising from 5% to 20%, the Georgetown Center report says. “Insurers who believe their company will stay in the marketplaces believe that their premiums would have to increase to accommodate an individual mandate repeal,” the report says. “One large insurer noted that the prevailing industry estimate puts the likely premium increase effect of a repeal in the range of 5% to 15%, although at least one analysis put this even higher, at above 20%,” the report says.
Health insurers only have a short window to make a final decision on their intentions for selling online via the public exchanges. Health insurers must file their proposed 2018 plans for coverage and premiums with state insurance departments in May, although under current regulatory timeframes, carriers have until September 2017 to assess their own enrollment plans. “Products for 2018 are already well under development and filing deadlines for 2018 coverage are only a few months away,” the report says. “One insurer reported ‘making our decisions’ about next year (2018) in the first quarter of 2017.’”
In the end, what health insurers want is time to react to any changes, says the Georgetown Center on Health Insurance Reform.
“If the ACA is repealed after a delay but not concurrently replaced, or if the individual mandate is immediately ended, insurers expect material market exits and significant premium increases for the 2018 plan year,” the report says. “If the third scenario occurs and cost-sharing subsidies cease in mid-2017, the destabilization of the marketplaces will accelerate regardless of whether the ACA is repealed, with insurers exiting or raising premiums midyear.”