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Insurers may say 'we have to get out' if Obamacare repealed without replacement

Outside Trump Tower in New York, health care justice advocates and other grassroots groups gathered to demand that Trump not agree to repeal the Affordable Care Act or attempt to refund Medicare or Medicaid and that he advocate for single-payer healthcare which is the best solution to our current healthcare crisis.
Erik McGregor | Pacific Press | LightRocket | Getty Images
Outside Trump Tower in New York, health care justice advocates and other grassroots groups gathered to demand that Trump not agree to repeal the Affordable Care Act or attempt to refund Medicare or Medicaid and that he advocate for single-payer healthcare which is the best solution to our current healthcare crisis.

If Republicans repeal the Obamacare individual mandate without a concrete replacement plan, we could see another year of big price increases and insurer withdrawals for open enrollment in 2018, according to a new report.

"The greater the uncertainty, the higher the rates," said Sabrina Corlette, a Georgetown University research professor and one of the authors of the new report, which was published by the Urban Institute and the Robert Wood Johnson Foundation.

"At a certain point you can't even price high enough to account for the uncertainty and it's at that point that the carriers say, 'we have to get out,'" said Corlette.

The researchers interviewed executives from more than a dozen health insurance firms over the last month, from companies that are offering plans on Obamacare exchanges this year. The uncertainty has many already weighing their participation next year.

Among insurers' key concerns is that they won't know what the ACA replacement policies will be in time for them to develop new rates for 2018. Initial rate requests are due in May.

House Speaker Paul Ryan outlined a legislative timeline at the Republican policy retreat in Philadelphia, which calls for Congress to vote on bill that would repeal and replace major parts of the Affordable Care Act by April.

"We've been working with the administration on a daily basis to map out and plan a very bold and aggressive agenda to make good on our campaign promises… to repeal and replace and repair our broken health-care system," said Ryan, in Philadelphia.

Insurers also worry that repealing the individual mandate without creating a measure to prompt enrollment, would increase the risk that only sicker, high-cost enrollees would sign up for coverage in the individual market.

It's unclear whether President Donald Trump's executive order on the ACA will effectively kill the individual mandate by authorizing agencies including the Internal Revenue Service to provide relief for Obamacare penalties. It may not matter.

"In some ways there's this public perception issue that could be just as destabilizing as the IRS taking action," said Corlette.