A report released Friday by Standard & Poor's Financial Services finds that the stability of the ObamaCare marketplace is improving for insurers but could be upended by disruptive actions from Washington.
The S&P report contradicts Republican claims that the Affordable Care Act (ACA) is in a “death spiral,” finding that while the market is not yet fully stable, more insurers will soon be making money on the exchanges if the law does not undergo drastic change.
“If the market continues unaffected, with a few fixes rather than an overhaul, we expect 2018, or Year 5 of the ACA individual market, to be one of gradual improvement with more insurers reporting positive (albeit low single-digit) margins,” the report states.
The report adds flatly that: “2016 results and the market enrollment so far in 2017 show that the ACA individual market is not in a ‘death spiral.’”
Still, the report warns that uncertainty due to Republicans’ actions in Washington could throw off this steady improvement in the market.
At the top of the list causing uncertainty for insurers is the possibility that the Trump administration could cancel ObamaCare payments known as cost-sharing reductions. Those payments reimburse insurers for giving discounted deductibles to low-income ObamaCare enrollees.
House Republicans sued the Obama administration, arguing the payments were being made unconstitutionally, without a congressional appropriation. That lawsuit is still underway.
Without certainty that they will actually be given the payments next year, S&P warns that insurers will have to raise premiums to account for the risk, or possibly even drop out of the market altogether.
Other Trump administration decisions, like whether to loosen up on enforcing the mandate for people to get coverage, will also have an effect, the report said.
“If insurers are uneasy regarding the future of the market, they may have to decide between adding an ‘uncertainty buffer’ to their pricing or — worst case — exiting the exchanges altogether,” the report states.
Democrats seized on the S&P report.
"Today's report from S&P confirms that the Affordable Care Act is on stable ground, but it warns that Republicans' efforts to sabotage the law could impede that stability,” said Rep. Frank Pallone Jr. (N.J.), the top Democrat on the Energy and Commerce Committee.