Health insurance giant Anthem Inc. didn’t cite President Trump when it announced Tuesday that it was withdrawing from the Obamacare marketplace in Ohio, leaving the marketplace with no insurer in at least 18 counties. But Anthem pointed the finger right at him — and at the Republicans in Congress who are trying to “repeal and replace” the 2010 healthcare law.
The insurer’s move isn’t as bad for Ohio as it sounds, given that only about 13,000 people shop for policies on the marketplace in those counties. But it tells the administration and Congress to stop sabotaging the health insurance market before other insurers follow suit. Yes, there were problems in the exchanges before 2017, but Trump and congressional Republicans have made them much, much worse.
At issue is the individual insurance market, which serves people not covered by large employer health plans. These policies are sold both on and off the state insurance exchanges, but these exchanges are the only places where consumers may take advantage of the premium and cost-sharing subsidies that the Affordable Care Act provides.
Rather than trying to undermine the ACA marketplaces until they collapse, the administration and Congress should be shoring them up.
Anthem said it was pleased that the government has tried to improve programs designed to help insurers with disproportionately sick customers and deter people from gaming the system. Nevertheless, it said, the market for individual policies is still “volatile” and getting increasingly unpredictable, forcing the company to the sidelines.
One specific reason was the uncertainty surrounding whether Washington would pay insurers for the cost-sharing subsidies the ACA requires them to give their lowest-income customers — funding that Trump himself has cast in doubt. And for no good reason, because the only things insurers are likely to do in response are to raise everyone’s premiums to cover the cost of the subsidies or drop out of the market.
The administration also has destabilized the individual market by deciding not to enforce the tax penalty on adults who don’t obtain insurance coverage, as required by the ACA. Without the penalty, younger and healthier Americans are more likely to go without insurance, leaving insurers with a costlier group of customers and driving up premiums. Meanwhile, the House passed a Republican-penned bill that would repeal the insurance mandate and replace it with a far milder penalty, which also would encourage healthy people to avoid coverage until they knew they needed care.
Compared to the number of people insured through their employers or through healthy individual marketplaces, such as California’s, the population at risk here as small. But to those who need insurance but suddenly can’t find it or can’t afford it, the threat is practically existential.
Rather than trying to undermine the ACA marketplaces until they collapse, the administration and Congress should be shoring them up. Republicans aren’t likely to embrace proposals like the one from California’s two Democratic senators, Dianne Feinstein and Kamala Harris, and Sen. Elizabeth Warren (D-Mass.) to help more Americans afford individual insurance coverage by providing subsidies to anyone whose monthly premiums exceeded 9.69% of their monthly income. But they could take a number of less dramatic steps to stabilize the individual market, starting with committing to paying for the cost-sharing subsidies that the law now requires. They should also lift the exemption for pre-ACA noncomprehensive individual policies that have kept healthier people from signing up for coverage through the ACA marketplaces. They can do a far better job encouraging younger, healthier people to buy coverage. And they can explore multistate insurance compacts that bring more people into risk pools, thereby more safely spreading costs and risks.
At the moment, Senate Republicans are trying to line up enough votes to pass their own version of the House’s misbegotten American Health Care Act, which seeks to lower premiums for the healthy at the expense of those with preexisting conditions. The fight in the Senate reportedly is over whether to keep the Medicaid expansion that the ACA authorized, an expansion that helped fuel a dramatic reduction in the number of uninsured Americans. Instead of struggling to figure out a politically palatable way to end coverage for millions of people, lawmakers and the White House should stick to solving the problems in front of them — particularly the ones they’re creating.