Health Insurance

'Significant' parts of US could lose coverage if Obamacare replacement is delayed, CMS boss Andy Slavitt says

Slavitt: GOP plan must maintain coverage levels

The man in charge of Obamacare said Thursday that Congress will risk leaving millions of Americans without health coverage in "significant parts of the country" — as well as job losses — if it repeals the Affordable Care Act without having a replacement plan ready to be put into place.

Andy Slavitt's warning came a day after a leading group of actuaries, who help set insurance rates, wrote Congress with concerns that repealing Obamacare while delaying coming up with a replacement plan could significantly disrupt the market for individual health plans.

A number of Republican congressional leaders have proposed immediately repealing major parts of Obamacare, while delaying the effective date of repeal for at least two years while a replacement plan can be crafted.

Andy Slavitt
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"I think that disruption will come in the form of health plans being really paralyzed and not knowing what to do ... and I think that begins to ripple," said Slavitt, acting administrator of the federal Centers for Medicare and Medicaid Services, during an interview on CNBC's "Squawk on the Street."

"Hospital CEOs and health plan CEOs have been saying privately, and are beginning to say publicly that, you know, they're really going to be in no position to continue to invest ... as they move into 2018," Slavitt said.

Health insurers must begin to decide what premium rates they want to charge for Obamacare plans in 2018 in the first quarter of 2017, he said.

The American Academy of Actuaries, in its letter to Congress on Wednesday, warned that more insurers may decide to abandon the Obamacare marketplaces if there is no plan in place in early 2017 that would assure them of sufficient numbers of customers and sufficient levels of relatively health customers who would offset their costs of coverage.

"If the Congress says 'We're not sure what's going to be there'" in 2018 or 2019, Slavitt said, "in all likelihood, we're going to have really significant parts of the country without coverage" from Obamacare plans.

"I think what would result from that is job loss, and so forth," said Slavitt, noting that 2 million health-care sector jobs have been created since the ACA was implemented.

The ACA has been credited with increasing the number of customers in the individual health insurance market — private plans that cover people who don't have insurance through an employer — through several provisions.

Obamacare mandated that nearly all Americans have some form of health coverage or pay a fine, barred insurers from denying coverage to sicker customers or charging them higher premiums, and offered many low- and middle-income people subsidies to reduce the cost of their monthly premiums as well as their out-of-pocket health costs.

The idea of repealing the mandate to have health coverage while continuing to bar insurers from discriminating against sicker customers has worried insurers, who would be faced with potentially fewer customers overall, but steeper benefit costs.

An estimated 20 million Americans have gained health insurance, driving the nation's uninsured rate to record lows, since the ACA went into effect. In addition to expanding coverage through private individual plans, the ACA increased the number of poor adults eligible for Medicaid, and allowed people up to age 26 to be covered by their parents' health plans.

President-elect Donald Trump has said he wants to repeal Obamacare and replace it with something better. But there is no consensus among his fellow Republicans who control Congress on what such a replacement plan will look like.

Correction: Andy Slavitt spoke on Thursday and the American Academy of Actuaries letter was on Wednesday. An earlier version misstated the days.