Health and Science

Obamacare repeal fallout: Three things health insurers need answers to now

Key Points
  • Health insurance companies are scrambling for information as the Obamacare repeal effort stalled in the Senate.
  • Insurers want to know if cost-sharing subsidies will continue, if they will have to pay the health insurance tax and if the Trump administration will promote and support enrollment in 2018.
Dr. Anne Furey Schultz examines a patient complaining of flu-like symptoms at Northwestern Memorial Hospital in Chicago.
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With the defeat of the Obamacare repeal in the Senate, there are a number of key issues insurers need the Trump administration to clear up in the next few weeks in order to determine whether they'll offer marketplace plans for 2018.

Obamacare remains the law of the land, but the administration has tremendous leeway in how it enforces the program. At the heart of insurers concerns is whether the Department of Health and Human Services will try to provide greater stability for Affordable Care Act exchanges.

Here are the top three things insurers want to know right now:

1. Will the administration continue paying cost-sharing reduction subsidies through next year?

Every month, insurers are supposed to get reimbursed for so-called CSR subsidies, which they pay out to help cut out-of-pocket costs for their lower-income Obamacare plan members.

The Trump administration has been reimbursing insurers on a month-to-month basis, while it decides what to do about a federal judge's ruling that the payments weren't authorized by Congress.

"I don't get the impression that there's advanced warning that it's coming every month," or if the payments will stop, said Ceci Connolly, president and CEO of the Alliance of Community Health Plans.

Under the Trump administration, she said, insurers in her group say they "kind of wait by the mailbox" every month.

The next CSR payment is due the week of Aug. 20. That's the same week the court case surrounding those payments is due back in court, after having been continued twice this year.

2. Will the health insurance tax be coming back next year?

Under Obamacare, insurers have to pay a 3 percent tax on every plan. This year the tax was put on hold. Insurers need to factor in the return of the tax next year into their 2018 rate requests.
Insurers have cited both the uncertainty over CSRs and the tax as part of the reason they submitted higher-than-expected rate increase requests.

"If we aren't able to gain certainty on some of these items quickly, we do expect that we will need to revise our rate filings to further narrow our level of participation," warned Joseph Swedish, chairman and CEO of Anthem earlier this week.

Swedish said on the company's second-quarter earnings call that his firm will need real clarity by early September from state and federal officials about marketplace rules for 2018, or Anthem may exit more markets.

"If the level of uncertainty in the marketplace is reduced, we would have increased confidence in our ability to predict the appropriate level of market participation," he said.

Insurers have until Aug. 15 to revise their rate requests for states on the federal exchange. Ahead of the Senate vote, health insurers appealed to Mitch McConnell and Chuck Schumer to urge them to push for funding of CSR payments, and to provide immediate short-term stabilization of the marketplaces.

"We stand ready to continue to work with Congress and the administration on solutions to ensure that the American people have affordable, high-quality choices for their coverage and care," said Kristine Grow, spokesperson for America's Health Insurance Plans, known as AHIP.

3. Will the administration promote and support 2018 open enrollment?

The Trump administration set a much narrower window for open enrollment this fall. The sign-up period will run for six weeks, from Nov. 1 through Dec. 15 — that's half as long as enrollment periods in the last three years.

This month the Centers for Medicare and Medicaid ended contracts to pay community groups that helped people enroll for coverage at libraries, community centers in 18 cities across the country.

Analysts say without strong outreach, it may be even tougher to get younger, healthy people to enroll in exchange plans during the shortened enrollment period. And, if the administration announces that it will stop enforcing the individual mandate, younger people will have even less incentive to sign up.


So far, CMS and health department officials have mostly talked about stabilizing the marketplaces within the context repeal legislation. If insurers want assurances that the administration will take new measures on its own, one veteran industry consultant says they shouldn't hold their breath.

"Will Trump make things worse in the Obamacare insurance exchanges? Probably," said Robert Laszewski, president of Health Policy and Strategy Associates.

He noted that President Donald Trump certainly does not appear ready to provide support for the market in the wake of the failed Senate vote.

"As I said from the beginning, let ObamaCare implode, then deal. Watch!" the president exclaimed in a tweet early Friday, following the failed vote in the Senate.