Obamacare is in real danger

The Affordable Care Act is in deep trouble — in Washington and large swaths of the country.

Senate Republicans began to coalesce around the framework of a plan to repeal and replace the law last week. Their plan would, like the bill the House passed in May, almost certainly cause millions of low-income Americans to lose coverage by ending the Medicaid expansion. It would help the young and healthy at the expense of the older and the sick.

Meanwhile, across the nation, health insurance plans are beginning to flee the Obamacare marketplace. They’ve cited the uncertainty around the health care law’s future, sown by congressional Republicans and the Trump administration. The number of counties with zero health plans signed up to sell 2018 coverage keeps growing.

The possibility that Republicans will repeal Obamacare or drive it into collapse is an increasingly real one. That’s a reality where millions fewer have health insurance and lower-income Americans struggle to afford coverage.

“Slowly but surely, I think we’re gonna get there,” Sen. John Cornyn (R-TX), the

No. 2 Republican, told reporters on Thursday, regarding Obamacare repeal. “We’re coming together.”

The Senate repeal plan is coming together — and looks a lot like the House repeal plan

Behind closed doors, Senate Republicans have worked out a path toward Obamacare repeal. The plans under discussion would end Medicaid expansion, causing millions of low-income Americans to lose health coverage. They may allow health insurance plans to charge higher premiums to people with preexisting conditions, too.

In other words: The emerging bill looks a whole lot like the unpopular bill the House passed last month. It creates the same group of winners (high-income, healthier people) and the same group of losers (low-income, sicker people).

The Republican plan is coming together because moderate senators are beginning to drop some of their initial repeal objections. Sens. Rob Portman (R-OH) and Shelley Moore Capito (R-WV), for example, now back a plan to end the Medicaid expansion.

Both were ardent critics of the House bill’s deep Medicaid cuts, which would cause 14 million Americans who rely on the public program to lose coverage. Portman put out a harsh statement the day the House passed its health care bill.

“I’ve already made clear that I don’t support the House bill as currently constructed because I continue to have concerns that this bill does not do enough to protect Ohio's Medicaid expansion population,” Portman said plainly.

But now Portman has endorsed a plan to phase out the Medicaid expansion entirely, just to do so on a longer timeline than the House bill. Portman and Moore Capito want a seven-year phase out, rather than the House bill’s three-year off-ramp.

At the end of the day, though, phasing out Medicaid expansion over seven years has the same effect as three years: You end coverage for millions of low-income Americans.

There are still major issues that divide Senate Republicans on repeal. There is disagreement, for example, over how much to cut the Medicaid program and what kind of subsidies to give people in the private market. But the fact that Republicans are coalescing around ending Medicaid expansion — once thought to be a major sticking point — suggests the path to repeal may be easier to find than initial expectations.

Health insurance plans are fleeing the Obamacare marketplaces

Insurance plans are scaling back their Obamacare participation or quitting the marketplace entirely. Most cite the growing uncertainty over the law’s future — whether it will be repealed and how the Trump administration will implement it.

In the past week, the number of counties with zero health plans signed up to sell Obamacare has doubled. There are now 38,000 Obamacare enrollees scattered across 47 counties where no insurers want to participate in the marketplaces.

In these places, Obamacare's coverage expansion could vanish regardless of whether Congress passes a repeal bill. People with Obamacare subsidies would still technically get that help, but would have no place to actually buy coverage.

Anthem announced last week that it would exit the Ohio marketplace, leaving 20 counties and 15,000 Obamacare enrollees with no 2018 option.

Anthem has been lukewarm on the 2018 marketplaces. Reports earlier this spring from analysts who follow the company said it was “leaning towards exiting.” But Anthem has decided to stick with a few marketplaces. An Anthem exit in the rest of the states where it currently sells would be devastating to the law, leaving 300,000 Obamacare enrollees without coverage.

When Blue Cross Blue Shield Kansas City quit on May 24, it blamed the “uncertain direction of this market.”

The Affordable Care Act relies in large part on private health plans volunteering to sell coverage on these public marketplaces. There are not mechanisms in the law to force insurers to participate.

“We elected to have a system that is completely market-based so companies get to make individual decisions,” says Andy Slavitt, who served as Medicare administrator in the Obama administration.

Under the Trump administration, it has become increasingly difficult for health plans to make the decision to participate on a marketplace that the president says is “exploding.” Who wants to build a business around a law that the White House is actively trying to tear down?

“The information we’ve seen coming from the administration actually creates more uncertainty rather than creating greater certainty,” says Brad Wilson, chief executive of Blue Cross Blue Shield North Carolina.

Republicans have political incentives not to fix Obamacare's problems

Whenever a health insurance plan quits Obamacare, I usually receive an email from the Health and Human Services press office arguing that this is all the more reason Congress needs to repeal Obamacare. This is the statement that spokesperson Alleigh Marré sent out when Anthem quit the Ohio marketplace last Tuesday (bolding my own):

This news is heartbreaking for the millions of Ohioans who depend on access to affordable, high-quality healthcare, and this is a stark reminder that Obamacare is collapsing. Now is the time to advance real healthcare reform that empowers individuals and families with the choices and resources they need to buy a plan that meets their healthcare needs without breaking their budgets. The American people can’t afford to wait any longer.

When Republican legislators talk about why they need to repeal Obamacare, they point to the areas that are struggling to attract health insurers. They point to Obamacare's bald spots and make the argument that a new law is needed to fix the problem.

"What kind of protection is Obamacare if there are no plans to choose from?" House Speaker Paul Ryan said at the Rose Garden ceremony last month to celebrate the House bill’s passage.

When insurance executives talk about why they're leaving, they point the finger back at the uncertainty Republicans are sowing. They don’t want a new law; they want more certainty around existing law. Specifically, they want to know whether the administration will pay for a key subsidy program that it has so far waffled on implementing.

“The discussion that is happening in Washington, that creates additional uncertainty,” says Geoff Bartsh, a vice president at health plan Medica, which sells on the marketplaces. “When you’re dangling the cost-sharing subsidies — they’re on the table, they’re off the table — that creates uncertainty.”

Insurers' exits from Obamacare don't just mean fewer (or no) choices for the millions of Americans who rely on the law. They also give Republicans more ammo for pushing their repeal plan forward — and make the path toward passing a Senate bill an easier one to forge.