Trump's actions on Obamacare threaten to undermine insurance markets

The Trump administration’s decision to pull television ads urging Americans to sign up for coverage under the Affordable Care Act is stoking fears that the White House is trying to sabotage the nation’s insurance markets in an effort to hobble the program, jeopardizing coverage for millions.

The move, which comes just days ahead of a critical enrollment deadline for Obamacare health plans, follows Trump’s executive order last weekend in which he suggested his administration wouldn’t implement rules crucial to sustaining viable markets.

And it coincides with a concerted effort by Trump and Republican congressional leaders to portray the law as collapsing, despite evidence to the contrary from independent analysts.

Senior Republicans have been pressuring health insurers to publicly declare that Obamacare is failing, according to industry officials. A number of health plan leaders told congressional Republicans that they would not say that, said the officials, who asked not be identified for fear of antagonizing the GOP.

The Trump administration has billed the president’s moves as the first steps toward repealing and replacing the 2010 healthcare law.

“We aren’t going to continue spending millions of taxpayers’ dollars promoting a failed government program,” a senior communications advisor to the Department of Health and Human Services said, explaining the decision to pull $5 million worth of television advertising. The ad time was already paid for.

The aide, who was not authorized to speak publicly, said call centers remain open and the HealthCare.gov website is still taking applications, as are state-based marketplaces such as Covered California.

But market experts and industry officials warn that Trump’s moves over the past week threaten to unravel insurance markets, driving away customers and insurers and leaving millions of Americans without heath insurance, even as Republicans struggle to come up with a replacement for the current law.

“In places where markets are clearly working, like California, they could do a lot of harm,” said Jay Gellert, former chief executive officer of Los-Angeles-based Health Net Inc., a national insurer that was acquired last year by St. Louis-based Centene. 

Insurers worry that Trump’s action will deter enrollment by younger, healthier consumers who are key to the markets’ sustainability.

”Everyone knows that this last week of the enrollment period is critical for getting young people signed up,” said Andy Slavitt, former head of the federal Centers for Medicare and Medicaid Services, which runs HealthCare.gov.

The marketplaces, a key pillar of the law, provide coverage to about 10 million people, who can shop for commercial health plans through HealthCare.gov and the state exchanges. All plans must offer basic benefits, and low- and moderate-income people qualify for subsidies that offset the cost of their premiums.

Along with Medicaid expansion, also made possible by the healthcare law, the marketplaces have helped cover more than 20 million previously uninsured Americans and driven the nation’s uninsured rate to a historic low.

But, while marketplaces in some states are functioning relatively well, elsewhere they are severely strained. Insurers have stopped selling plans, and some that remain have raised premiums sharply to account for sicker than expected customers.

That has fueled GOP criticism and calls for the full repeal of the law.

“Obamacare is a disaster,” Trump told cheering Republican lawmakers Thursday at a GOP retreat in Philadelphia. “It's going to explode like you've never seen an explosion. Nobody's going to be able to afford it.”

Some consumers, particularly those who don’t qualify for government subsidies, are seeing substantial premium increases and narrowing networks.

But as the 2017 open enrollment period draws to a close Tuesday, there are signs the markets may be stabilizing and could be fixed without dismantling them.

In the run-up to Trump’s inauguration, enrollment was running slightly ahead of last year’s pace.

“We’ve seen some of the best numbers we’ve had in four years,” said Jodi Ray, who oversees Obamacare enrollment efforts in Florida as project director for Florida Covering Kids and Families.

In Georgia, Sheila Carter, who helps direct enrollment efforts for InsureGA, which has been signing people up there, said doors were kept open open for three hours after the scheduled closing at one recent event to accommodate everyone who wanted to get coverage.

At the same time, an increasing number of independent analyses have concluded that the marketplaces would probably continue to grow if the law was not altered.

The closely watched nonpartisan Congressional Budget Office predicted in its most recent projections that enrollment on the marketplaces would increase by about one-third over the next decade, rising from about 10 million this year to 13 million in 2027.

And Standard and Poor’s last month projected that more insurance companies that sell plans on the marketplaces would likely break even or make money in 2017.

Trump’s recent moves threaten that growth by depressing enrollment, experts say.

The White House executive order hinted that the administration might offer more exemptions from the unpopular insurance mandate, which could prompt more healthy people to skip coverage.

And the recent decision to pull the television advertising, first reported by Politico, undermines efforts to enroll younger, healthier people, who are more likely to wait until the last minute to sign up for coverage and whose participation is crucial to keeping premiums in check.

“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,” said Kristine Grow, a spokeswoman for America’s Health Insurance Plans, the industry’s Washington-based lobbying arm.

“Balancing out the risk pool is an important action that can be taken now to help stabilize the market, improve affordability and send strong signals as health plans develop their products for 2018,” she said.

Trump has offered repeated assurances that Republicans would not allow Americans to lose their coverage.

But his critics say there is diminishing evidence this is true.

“The Trump administration’s mean-spirited decision to pull the already-paid-for enrollment ads belies the president’s promise that he wants to cover ‘everybody’ with health insurance,” said Ron Pollack, executive director of Families USA, a leading consumer advocacy group.

“As this action demonstrates, the president’s promise is all show, no reality.”

noam.levey@latimes.com

@noamlevey

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