The next president could be dealing with an ObamaCare insurer meltdown in his or her very first month.
The incoming administration will take office just as the latest ObamaCare enrollment tally comes in, delivering a potentially crucial verdict about the still-shaky healthcare marketplaces.
The fourth ObamaCare signup period begins about one week before Election Day, and it will end about one week before inauguration on Jan. 20. After mounting complaints from big insurers about losing money this year, the results could serve as a kind of judgment day for ObamaCare, experts say.
“The next open enrollment period is key,” said Larry Levitt, senior vice president of the Kaiser Family Foundation.
The Obama administration has struggled for several years to bring young, healthy people into the marketplaces, which is needed to offset the medical costs of older and sicker customers.
These problems are coming to light this year, as insurers get their first full look at ObamaCare customer data. Some, like UnitedHealth Group, say they’ve seen enough and are already vowing to leave the exchanges.
Levitt and other experts warn that if the numbers don’t improve this year, more insurers could bolt. That would deal a major blow to marketplace competition while also driving up rates and keeping even more people out of the exchanges.
Already, many insurers this year are proposing substantial rate hikes with the hopes of making up for higher recent medical costs. The average premium increase next year is about 9 percent, according to an analysis of 17 cities by the Kaiser Family Foundation. But some hikes are far higher: Blue Cross Blue Shield has proposed increases of 40 percent in Alabama and 60 percent in Texas.
Levitt said the premium hikes could be “just be a one-time market correction” in the still-new marketplace. But if insurers continue to lose money, it could be a sign of bigger problems.
Republican nominee Donald TrumpDonald TrumpBiden heading to Kansas City to promote infrastructure package Trump calls Milley a 'f---ing idiot' over Afghanistan withdrawal First rally for far-right French candidate Zemmour prompts protests, violence MORE has vowed to undo ObamaCare, but it could be a tough test for Hillary ClintonHillary Diane Rodham ClintonRepublican Ohio Senate candidate slams JD Vance over previous Trump comments Budowsky: Why GOP donors flock to Manchin and Sinema Countering the ongoing Republican delusion MORE, President Obama's potential Democratic successor.
Clinton has already laid out plans to help boost enrollment by making coverage more affordable for people who are still priced out of ObamaCare.
Like Obama, she vowed to invest in advertising and in-person outreach to help more people enroll. Clinton would also increase ObamaCare subsidies so that customers spend no more than 8.5 percent of their income on premiums — down from 9.5 percent under current law.
She has also proposed a tax credit of up to $5,000 per family specifically to offset rising out-of-pocket costs — a side effect of cheaper plans offered under ObamaCare.
But other experts say the problems could lie deeper and that it would take a major shift in ObamaCare’s customer base to offset those massive medical costs.
Insurers have fretted for years about lower-than-expected enrollment through ObamaCare.
Last year, more than 11 million people bought coverage through the exchanges. While that figure beat the Obama administration’s expectations for 2016, it’s a huge drop from the Congressional Budget Office’s initial projections that 21 million would be enrolled by that time.
Now, several high-profile insurers are raising new concerns about the healthcare law’s mix of customers and questioning whether their companies can keep selling ObamaCare plans.
Part of those concerns stem from distrust of the Obama administration after its key marketplace stabilization program — known as risk corridors — was too cash-strapped to pay back the insurers. In the first two years of the healthcare law, more insurers than expected have ended up with balance sheets in the red. As a result, the risk corridor pool was left with only about $1 to cover every $10 in claims.
But those risk corridor payments, as well as from a similar program called reinsurance, have played a major role in controlling costs for insurers.
A recent study by the nonprofit Commonwealth Fund found that medical claims were only 2 percent higher than insurers projected, after taking into account the reinsurance payments.
In some corners, though, insurer complaints are seen as fresh evidence that ObamaCare marketplaces are on the brink.
In the last month, two major insurers — Aetna and Anthem — both reversed course on their plans to expand in the marketplace. Now, all five of the nation’s largest insurers say they are losing money on the exchanges.
“From a policy point of view, we’re basically seeing the exchanges unravel,” said Michael Abrams, a healthcare strategist with Numerof & Associates who consults for insurers including UnitedHealth Group.
“More than anything else, it’s a serious symbolic blow to ObamaCare,” he said.
The two companies’ abrupt decisions to pull back from ObamaCare have baffled healthcare experts. Both Aetna and Anthem had previously been optimistic about the marketplace, unlike UnitedHealth, which had been cautious from the start.
As recently as this spring, Anthem said it was “well-positioned” to stay in the marketplace, and Aetna said it was in a “very good place."
None of the top five companies — which also include UnitedHealth, Cigna and Humana — had been major players in the ObamaCare marketplace and are unlikely to cause sudden rate hikes for most customers. They’re also unlikely to have a major effect on competition next year, though some people could see rate hikes in the local markets where the carriers are exiting.
Some experts say the insurers’ moves this year could be part of a strategy to drive more changes to the marketplace over time.
“I’ve been dealing with insurance companies for many years, and it is often the case that insurance companies say, ‘Gee, things are horrible, business is horrible, we’re going to pull out,” said Leighton Ku, a professor of health policy at George Washington University.
“Some of it is a posturing thing, this is what companies do,” added Ku, who also sits on the board of the D.C. Health Exchange.
"Some insurers will say, ‘We’re unhappy, we’d like to get paid better.’”