GOP eyes new ObamaCare strategy: Repeal and delay

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A Republican plan to quickly repeal most of ObamaCare but delay the effects for up to two years is gaining steam on Capitol Hill.  

The plan would allow Republicans to deliver on promises to repeal the law in the next Congress while buying them time to come up with a replacement. But there’s a problem: If insurers know the law is going away, they might drop out immediately, causing chaos for enrollees before any replacement plan has time to take shape. 

{mosads}While 2017 coverage is already locked in, an exodus of insurers for 2018 would throw coverage into doubt for the roughly 10 million people enrolled in ObamaCare plans. 

“If they know the law is ending sometime soon, I don’t know that they’re going to be so excited about sticking around,” Larry Levitt, an expert on the healthcare law at the Kaiser Family Foundation, said of insurers. 

The liberal Center for American Progress (CAP) put out a report Wednesday warning that simply putting a two-year delay on repeal going into effect, through a fast-track process known as reconciliation, would not ensure a stable transition to a new system. 

“Even with a delayed effective date, the reconciliation bill approach would cause massive disruption and chaos in the individual market for health insurance,” the report said. “The complete unraveling of the market would occur by the end of 2017.”

Insurers would need to decide by next spring whether to participate in the ObamaCare marketplaces in 2018. If there is not certainty about what the system will look like the next year, the report argued, insurers are likely to avoid the risk of heavy losses and drop out. 

Mario Molina, CEO of Molina Healthcare, an insurer that participates in ObamaCare marketplaces in nine states, said the uncertainty after the election is making his job tough.

“It’s really difficult for us and I think for everyone else,” he said. “We’re all waiting for some clarification.”

He said he is eagerly awaiting details of a Republican replacement plan, saying that even the outline put forward by Speaker Paul Ryan (R-Wis.) is “pretty vague.”

“We need to know pretty soon, because if we’re going to make a decision on 2018, it’s going to have to come pretty soon,” he said. 

If the current system were to remain in place for a couple of years, Molina said, his company might still participate, even if the marketplaces were on the way out. 

“I think most of the investments are made,” he said. “The only question is would we expand into new territory.”

Healthcare lobbyists in touch with Republican congressional staff say quickly passing a repeal bill through the fast-track reconciliation process, but delaying its effects, is a leading option for the GOP now that Donald Trump has won the White House.

Trying to push through a replacement bill at the same time would be difficult, as Republicans have not coalesced around the details of a plan. 

Still, one Republican lobbyist noted that lawmakers would have to deal with the fallout from passing repeal without a replacement, even if the changes were delayed. 

“They’re still trying to have that conversation with their members about: Are we really going to take that risk that 2018 could be messy?” the lobbyist said, noting that blame might be pinned on Republicans since they are now in charge.  

Still, some insurers said they could keep participating in ObamaCare even if the current system were on its way out.

Jim Schowalter, president of the Minnesota Council of Health Plans, an insurer group there, said he could not speak for other states, but in Minnesota, “the answer is yes” as to whether insurers could stick around.

Perhaps more important, insurers said, would be if fixes are made to the current system, which has already seen an exodus of insurers unable to make money. 

Molina said that his company might not participate in 2018 anyway if changes to a program called risk adjustment are not made. Insurers complain that the program, which is intended to shield insurers from heavy losses, is not working properly.

In Minnesota, likewise, Schowalter said “more than tweaks” are needed for insurers to participate in 2018, even if ObamaCare is on its way out. 

But the removal of the current system is the larger issue. 

Mike Kreidler, the insurance commissioner in Washington state, said on a conference call organized by CAP Wednesday that he’s already beginning to have conversations with insurance companies and the governor’s office about the next steps. 

He said he is worried about a crash in the marketplace and that there might be no insurers offering ObamaCare coverage.  

“We really desperately need to have a replacement plan,” he said. “That’s the really critical part of this. Otherwise, they’re talking about repealing in a vacuum. I think that is a guaranteed recipe for absolute uncertainty going forward.” 

Sarah Ferris contributed.

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