Insurers scrambling to keep up with ObamaCare drama

Insurance companies blindsided by the Senate GOP’s decision to pull the plug on bipartisan talks and move forward again with ObamaCare repeal are scrambling to figure out how to move forward.

The death of the bipartisan push leaves them with no clear way to shore up fragile marketplaces ahead of the 2018 enrollment season, which begins Nov. 1.

The new ObamaCare repeal bill may get a Senate vote next week.

{mosads}If it becomes law, insurers will face a whole new world in 2020, with states deciding how to use millions in block grant funding that will come from Washington.

If it fails, it’s uncertain if there will be another bipartisan push.

Either way, it creates huge concerns for insurers.

“They look at this market and see problems,” said Chris Sloan, a senior manager with the consulting firm Avalere Health who describes insurers as having been invested in the bipartisan talks.

The biggest problem for insurers is that they don’t know if the Trump administration will continue federal subsidies known as cost-sharing reductions that allow insurers to lower out-of-pocket costs for low-income consumers.

But there are other worries as well, which Sloan said include premium increases, competition and fear that fewer people will sign up next year because of other administrative changes.

The Centers for Medicare and Medicaid Services’ deadline to finalize premium rates was Wednesday. Insurers have until next week — Sept. 27 — to sign contracts with healthcare.gov, locking them into selling plans on the federal exchange.

If some carriers drop out of the marketplaces, it’s possible areas of the country could be left without any plans to buy on the exchanges — a problem state officials and insurers had already fixed after it appeared residents in some states, like Virginia, Tennessee and Ohio, might have no options on the exchanges.

“We may see some departure. I think the uncertainty in Washington is not helping matters,” said Sabrina Corlette, a research professor at Georgetown University’s Center on Health Insurance Reforms. “But I think carriers recognize how dire the consequences are if they do make such a late decision on the customers that they serve.”

The outlines of a deal had emerged in the talks led by Senate Health Committee Chairman Lamar Alexander (R-Tenn.) and ranking member Patty Murray (D-Wash.).

It appeared it would fund the cost-sharing reduction payments and provide more flexibility for states to approve insurance plans and prices. The emerging deal also seemed set to let anyone — not just those under 30 — buy catastrophic plans with lower premiums and higher deductibles.

With the deal dead, it’s unclear whether the payments will continue, though the White House did foot September’s bill. A White House spokesman said no decision had been made about future payments.

If the administration stops the subsidy payments, insurers still, by law, have to offer discounts to low-income ObamaCare enrollees — whether they get reimbursed from the federal government or not.

“If I was an insurer my biggest concern right now about 2018 — I’ve already submitted my rates, that process is basically done — would be that October or November or December or January, the administration stops paying the CSRs,” Sloan said, “and I’m locked in, and I don’t have an opportunity to adjust my rates, and I’m basically locked in for a year not receiving any of those funds.”

The insurance industry has to price in future risks, so predictability is key — and they’ve been pleading with Congress and the administration for stability.

“I think what’s worrying them is the unpredictability of this administration and the unknown that they cannot price for,” Corlette said.

“And so that is causing, I imagine, many sleepless nights among insurance executives right now.”

The uncertainty has only been raised by the dramatic resurrection of the GOP’s ObamaCare repeal hopes, this time in the form of a bill from Sens. Bill Cassidy (R-La.) and Lindsey Graham (R-S.C.). It would end ObamaCare’s Medicaid expansion and subsidies to help people better afford health plans, instead converting the money into block grants for states.

The main insurer trade group, America’s Health Insurance Plans, sent a strong letter Wednesday to Senate Majority Leader Mitch McConnell (R-Ky.) and Minority Leader Charles Schumer (D-N.Y.) opposing the bill.

The legislation would have “real consequences on consumers and patients by further destabilizing the individual market; cutting Medicaid; pulling back on protections for pre-existing conditions; not ending taxes on health insurance premiums and benefits; and potentially allowing government-controlled, single payer health care to grow,” the group said.

The Blue Cross Blue Shield Association also has “significant concerns,” though the association comprised of 36 companies didn’t explicitly say it opposed the bill.

“The bill contains provisions that would allow states to waive key consumer protections, as well as undermine safeguards for those with pre-existing medical conditions,” the association said in a statement Wednesday. “The legislation reduces funding for many states significantly and would increase uncertainty in the marketplace, making coverage more expensive and jeopardizing Americans’ choice of health plans.”