Talk about an Obamacare explosion.
Remaining insurers are likely to flee the 2018 Affordable Care Act marketplace or raise premiums by an average of 25 percent in Florida, second most in the nation, based on one key decision President Trump and Congress make, according to a new analysis.
That decision: whether to guarantee billions of dollars in “cost sharing” subsidies that save consumers more than $5,000 a year in some cases. More than half the nation’s 12 million ACA marketplace customers, or 7.1 million, get such help, according to the nonprofit Kaiser Family Foundation.
“With each passing day, the uncertainty and lack of clarity increases the chances of insurers exiting,” said Larry Levitt, the foundation’s senior vice president of special initiatives. “Without clarity that these payments will be made, we will see insurers exiting or raising premiums substantially.”
Florida leads the nation with more than 1.6 million customers choosing plans on healthcare.gov, including about 100,000 in Palm Beach County and the Treasure Coast. Nationally and in Florida, a majority signing up are women and the largest ethnic group that voluntarily identifies itself on applications is white.
And it comes with big political implications. For the first time, a majority of Americans supported the Affordable Care Act in a Gallup poll released Tuesday. The 55 percent approval rating represented a substantial jump from 42 percent last November.
House GOP leaders worked on reviving a stalled Obamacare replacement plan last week, including moves to give states more say and flexibility in what health plans must include and how to cover very ill people. Speaker Paul Ryan called it “real progress.”
But with the House starting a two-week break, any deal that could satisfy competing factions in that chamber and the Senate likely has a long way to go. A first attempt to pass a bill in the House collapsed in March.
Yet a critical moment for the future of the Obamacare marketplace is already here.
Two big companies have announced they are leaving Iowa’s ACA marketplace in 2018, Aetna and Wellmark.
Other insurance companies are asking for guidance about money for cost-sharing reduction, or CSR. They have to make decisions soon to know what rates to propose by a revised filing deadline of June 21.
“We need certainty around the CSR issue before we can make a decision regarding our future in the Marketplace,” said a statement from Molina Healthcare.
While describing itself as “committed” to the marketplace, Molina will decide on “a state-by-state basis, including Florida,” the statement said.
Seven insurers offered plans on Florida’s ACA marketplace this year. A critical player will be Florida Blue, which has acknowledged it has been profitable in ACA market plans and offers them in all of Florida’s counties.
“We are not going to publicly speculate on what lies ahead for health care reform and the potential impacts on the company or our members,” Florida Blue spokesman Paul Kluding said. “We remain committed to working with both state and federal legislators to improve access and affordability of health care for all Floridians.”
House leadership has suggested it will appropriate funds, Levitt noted, but “mixed signals” are leaving insurers nervous. A lawsuit by the House, whose next court date is set for May 22, seeks to block such payments.
“While the lawsuit is being litigated, then the administration funds these benefits,” Ryan said on March 30.
The speaker has been asked why he would not favor dropping the lawsuit if the uncertainty alone about losing or keeping perhaps $7 billion in cost-sharing money destabilizes the ACA marketplace.
“Oh, we don’t want to drop the lawsuit because we believe in the separation of powers,” Ryan said. “We believe in Congress retaining its lawmaking power. But this lawsuit hasn’t run its full course. While this lawsuit is running its course, the administration is exercising their discretion with respect to CSRs. Our plan A here is to repeal and replace Obamacare and have that transition occur where these markets are stabilized. And that’s what we hope to achieve.”
As of Sunday afternoon, Trump, who hosted China’s president in Palm Beach in recent days, had not mentioned health care in his tweets since April 2: “Talks on Repealing and Replacing ObamaCare are, and have been, going on, and will continue until such time as a deal is hopefully struck.”
At a health care roundtable last week in Greenacres, groups who supported the Affordable Care Act told Democratic candidate for governor and Tallahassee mayor Andrew Gillum they were worried.
“My biggest question right now is what are the insurance companies going to do?” said Florence French, Palm Beach County organizer for Enroll America, an outreach group for health sign-ups. “If they’re not going to be there, it’s gone.”
About 1.6 million Floridians buy ACA marketplace plans, and nine out of 10 get subsidies of one kind or another. One form of government financial assistance lowers monthly premiums to $75 or less for about eight out of 10 enrollees, based on income.
The payments at issue now are for “cost-sharing,” meaning reducing the consumer’s co-pays and deductibles. The subsidies lower combined medical and prescription drug deductibles by as much as $3,354 and reduce annual out-of-pocket maximums by up to $5,587, according to Kaiser.
Kaiser analysts said insurers will likely raise premiums an average of 19 percent nationwide on ACA silver plans if cost-sharing money goes away. That’s on top of any other premium increases they seek for different reasons.
For politicians and groups committed to getting rid of Obamacare, the decision about whether to prop it up even temporarily presents tough choices.
“Of course it’s not a good thing for insurers to pull out,” said Andres Malave, Florida communications director for Americans for Prosperity, which calls itself a free-market advocacy group founded with support from industrialists David and Charles Koch. “We’re not rooting for Obamacare’s failures – they are just the facts of the law’s flawed design. But we shouldn’t be propping it up with things that might be illegal, and the American people deserve an answer from the courts before they’re paying out those funds.”
What does the public think?
A Kaiser tracking poll released last week found about 75 percent of voters think Trump and Congress should make Obamacare work until a replacement is ready, as opposed to making it fail.
About 61 percent said Obamacare’s problems going forward are the responsibilty of Trump and a GOP-led Congress, compared to 31 percent who said it was the responsibility of former president Obama and Democrats in Congress because they created the law.
Among Republicans that Kaiser polled, 80 percent think Trump eventually will be able to deliver on his promise that Americans will get better care at a lower cost. Only 8 percent of Democrats and 37 percent of all voters think that.
How many GOP voters think the administration should make Obamacare work, at least for now? This survey found a majority, 51 percent.
States hit worst
Projected premium increases if Affordable Care Act subsidies are eliminated to help consumers with co-pays, deductibles.
1. Mississippi 27 percent
2. Florida 25 percent
3. Alabama 25 percent
4. South Carolina 23 percent
5. Georgia 23 percent
Source: Kaiser Family Foundation