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Insurers now pressed to keep ObamaCare alive

March 27, 2017

The often-endangered Affordable Care Act survived its most serious political threat yet. Now it’s up to insurers to keep it alive.

On Friday afternoon, President Donald Trump and House Speaker Paul Ryan decided to cancel a scheduled House vote on the American Health Care Act, the Republican bill to repeal and replace the ACA. They lacked enough GOP votes to pass the bill, given opposition from both ultra-conservative and more moderate Republicans and zero Democratic support.

It’s uncertain if Trump or Ryan will try to revive the bill—or what they and HHS Secretary Tom Price will do to stabilize the shaky individual insurance market. Trump said last week that if the bill died, he would move on to other issues, and Ryan sounded the same note after the bill failed. Ryan said priorities now would be tax reform, border security, building up the military and infrastructure improvement.

“We’ll be living with Obamacare for the foreseeable future,” Ryan said. “We were on the cusp of fulfilling our promise of seven years, but we came up a little short. It’s a disappointing day for us.”

GOP leaders could face a crisis soon when jittery insurers must announce whether they’ll sell plans for 2018 and how they’ll price them. Ryan said his big concern is that the ACA insurance market could collapse, with exiting insurers and soaring premiums. “We’ll try to prop it up, but it’s so fundamentally flawed that I don’t know if it’s possible.”

But many experts say administration actions and and inactions—notably the failure to fund payments to insurers for cost-sharing reductions and reinsurance—have contributed to the instability. Ryan said the House bill would have funded reinsurance and risk-sharing pools, but that won’t happen now. It’s likely insurers will continue to lobby for that funding, with the threat that they’ll exit the markets without it.

Ryan hinted that there could be a political opening to revive the ACA replacement effort if the insurance markets collapse. “It’s going to get even worse,” he warned.

GOP fence-sitters broke against the bill Friday, with House Appropriations Committee Chairman Rodney Frelinghuysen of New Jersey announcing his opposition due to late revisions made to win over conservatives. Those changes, he said, raised “serious coverage and cost issues.” Republicans from Medicaid expansion states such as New Jersey were particularly nervous about backing the bill, which would effectively end Medicaid expansion in 2020.

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