Slowly but surely, we are seeing the practical effects of the Trump administration’s efforts to sow uncertainty over the Affordable Care Act’s future. They look like the very early stages of collapse.
Over the past two weeks, key health insurance plans have quit or scaled back participation in Obamacare marketplaces. This means there are now 47 counties scattered across Missouri, Ohio, and Washington with zero health plans signed up to sell 2018 marketplace coverage.
Approximately 38,000 Obamacare enrollees now live in places where no health plans want to sell Obamacare coverage in 2018. This is a small fraction of Obamacare enrollees — about 0.3 percent — who mostly live in rural, sparsely populated areas.
Health insurance plans pulling back from the marketplace at this point largely cite historical financial losses coupled with growing uncertainty over the law’s future.
The Obama administration worked hard to recruit health insurers to sell to these empty areas. The Trump administration, however, seems to want to stand aside and let Obamacare run on autopilot so it can explode or survive on its own.
President Donald Trump has given little reassurance to health plans that might be on the fence about entering Tennessee or other markets. His administration has waffled on whether it will continue funding key Obamacare payments. He has said he expects the marketplaces to “explode” on their own.
Many health executives have become frustrated with the Trump administration’s unwillingness to clarify whether it will continue to pay a key Obamacare subsidy program, which lowers copays and deductibles for low-income patients.
“The information we’ve seen coming from the administration actually creates more uncertainty rather than creating greater certainty,” says Brad Wilson, chief executive of Blue Cross Blue Shield North Carolina.
Let’s zoom in Obamacare’s three biggest trouble spots right now.
Ohio: Anthem’s exit leaves 20 counties bare
Anthem announced last week that it would exit the Ohio marketplace, leaving 20 counties and 15,000 Obamacare enrollees with no 2018 option.
Anthem has been lukewarm on the 2018 marketplaces. Reports earlier this spring from analysts who follow the company said it was “leaning towards exiting.” But Anthem has decided to stick with a few marketplaces. An Anthem exit in the rest of the states where it currently sells would be devastating to the law, leaving 300,000 Obamacare enrollees without coverage.
Missouri: the local Blue Cross plan pulls out and 20,000 Obamacare enrollees have no option
Blue Cross Blue Shield of Kansas City announced in late May that it will not sell coverage on the Obamacare marketplaces next year. The plan has experienced significant losses in recent years and is scared off by the current uncertainty over the health law’s future.
“Like many other health insurers across the country, we have been faced with challenges in this market,” Blue KC chief executive Danette Wilson said in a statement. “Through 2016, we have lost more than $100 million. This is unsustainable for our company. We have a responsibility to our members and the greater community to remain stable and secure, and the uncertain direction of this market is a barrier to our continued participation.”
Blue KC currently sells coverage in 32 counties in both Kansas and Missouri. Its exit will hit Missouri hardest, however, because it will leave 25 counties in the Western part of the state with no Obamacare insurers.
Washington: a local health plan scales back, and two rural counties have empty shelves
Washington state has aggressively implemented the Affordable Care Act, setting up a state-run marketplace and participating in the Medicaid expansion. This is a state where the leadership wants Obamacare to work — where, even as the Trump administration has waffled on the law’s future, Gov. Jay Inslee (D-WA) hasn’t.
But goodwill isn’t enough to hold Washington’s marketplace together. The state announced Thursday that it has two counties with no health plans signed up to sell coverage, one on the Western coast and another in Southern Washington. These are both rural, sparsely populated areas that aren’t especially attractive to insurance companies.
We know how the Obama administration would handle these situations. We don’t know what the Trump administration will do.
The Affordable Care Act relies in large part on private health plans volunteering to sell coverage on these public marketplaces. There are not mechanisms in the law to force insurers to participate. (States, however, have experimented with regulatory nudges, such as New York’s new requirement that states need to sell on the marketplace in order to bid on lucrative Medicaid contracts).
“We elected to have a system that is completely market-based so companies get to make individual decisions,” says Andy Slavitt, who served as Medicare administrator in the Obama administration.
Under the Trump administration, it has become increasingly difficult for health plans to make the decision to participate on a marketplace that the president says is “exploding.” Who wants to build a business around a law that the White House is actively trying to tear down?
In a way, the Republican repeal strategy seems to rest on these problems with Obamacare getting bigger and bigger. You will hear top House members like Paul Ryan pointing at these bald spots as evidence of why they need to repeal the health care law and replace it with something else.
But make no mistake: Republican uncertainty is at the root of the current problem. And there are real lives — 38,000 of them, to be exact — at stake as they continue to pursue this sabotage strategy.