The Trump administration is rushing to repeal and replace Obamcare, with an urgency they say is needed due to the imminent collapse of the individual health insurance market under the current health-care law.
But financial results from one of the nation's largest Obamacare health plan providers suggest the tide is beginning to turn for insurers just as the rules are poised to change.
Health Care Services Corp.'s improved results for 2016 may be a sign that health insurers are starting to get a better handle on pricing plans for exchange enrollees. This comes as Congress debates a plan the Congressional Budget Office estimates could result in millions becoming uninsured.
"Health Care Services Corp. had big losses, and it seems the amount of losses they're making is much less in the individual segment," said Deep Banerjee, an S&P Global director and health insurance analyst. "Overall, their net income has also improved year over year."
Health Care Services' so-called medical loss ratio was 96 percent for 2016 on its Affordable Care Act exchange plans, the company reported in a regulatory filing. This means the not-for-profit health insurer paid out 4 percent less on medical claims than it collected in premiums.
The previous year, the nonprofit Blue Cross Blue Shield health insurer, which covers 15 million people in five states, reported paying out 18 percent more in medical costs than it had collected on ACA premiums.
"Some of our plans say they've had success in starting to manage the health care of this population. They really were feeling they were getting onto a much better path with their individual business," said Ceci Connolly, president and CEO of the Alliance of Community Health Plans, a trade group that represents some the nation's largest not-for-profit insurers.
"That's a little bit of the irony of this: Three years into (Obamacare) they were getting the hang of the pricing" and now Congress is poised to change rules, she said.
GOP plan 'nonstarter' for insurers
Insurers have praised some of the regulatory changes that the Trump administration has instituted to try to stabilize the individual market, such as tightening special enrollment rules. The industry has been more cautious about the House GOP health bill known as the American Health Care Act.
Now, the nonpartisan CBO estimates that 14 million more people would be uninsured next year if the law is passed, in part because the repeal of the Obamacare requirement for individuals to buy insurance.
"The Congressional Budget Office is estimating that premiums are likely to go up 15-20 percent simply because of the repeal of the individual mandate, and the expectation that fewer healthy people will sign up," said Sabrina Corlette, a research professor at the Center on Health Insurance Reforms at Georgetown University.
Longer term, industry consultants say insurers are particularly worried about how the AHCA's reduced tax credits for lower income people could erode enrollment.