President-elect Donald Trump has consistently pledged to roll back Obamacare. Well, for the most part; he's hedged on whether he'd do away with some of the law's more popular aspects in recent days. But the uncertainty surrounding President Obama's signature domestic achievement under a Trump presidency and GOP-controlled Congress is already forcing insurance companies—including a tech-oriented startup co-founded by Joshua Kushner, the brother of Trump's son-in-law Jared Kushner—to prepare themselves for major disruption.
Kushner helped establish Oscar Health, a New York-based health insurance upstart that's striving to streamline how people sign up for individual insurance plans and navigate the convoluted American health system with the help of digital apps. The company's fortunes have been a decidedly mixed bag during its nascent years (despite a recent $2.7 billion valuation), which have wrought massive financial losses that led Oscar to slash its medical provider network and hike premiums for 2017.
But a new blog post by Kushner and his Oscar co-founder CEO Mario Schlosser highlights the difficulties that their company, and others like it, may face in the wake of significant Obamacare changes.
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"Though the precise nature of these changes has not yet been determined, we believe it is important to set forth Oscar’s observations on the healthcare landscape. What will never change is this: Oscar believes that all Americans deserve healthcare coverage that is high-quality and affordable for everyone," they wrote, adding that, "[in] introducing the first US healthcare market that incentivized a consumer-focused mindset and drove competition, the Affordable Care Act (ACA) undoubtedly helped us get off the ground."
Kushner and Schlosser went on to argue that Obamacare, for all of its problems, helped disrupt an existing individual market that some healthcare experts have compared to the "Wild West" of insurance. Before the law's passage, pricing was opaque; coverage wasn't guaranteed for sick customers; and the largely unregulated nature of the individual market (as opposed to the employer-sponsored and public health plans which cover the vast majority of Americans) made the competitive landscape extremely unpredictable.
The two note that the unpredictability has persisted in Obamacare's early years since insurance companies have been playing a guessing game as to who their customers would be and clearly underestimated just how many health services they would use. But their implication is that the market would have eventually figured out how to deal with the initial rockiness, and that tweaks to Obamacare's legitimate administrative problems could have helped that effort. They also pointed out that political grandstanding may have fostered these very issues in the first place.
"The government has also not fixed or not funded ACA programs designed to help insurers deal with the uncertainty of the first few years of the market," they wrote. "Doing so could have prevented the plan withdrawals that have so destabilized the market."
Trump and the GOP may very well keep major aspects of the health law. But it's an open question whether or not the statewide individual marketplaces where firms like Oscar operate will continue to persist, presenting major challenges for the new companies trying to capitalize on Obamacare's changes to the U.S. medical system.
Kushner and Schlosser did express optimism about some of the GOP's proposed Obamacare changes. For instance, they argued that continuous coverage for people with pre-existing conditions could minimize disruption, and that allowing both individuals and employers to use pre-tax dollars to buy insurance could help level an unequal playing field. Still, the firm's longer-term plans, such as selling health policies to workers employed by large employers (an Obamacare provision that wasn't set to go into effect until next year), may be in danger if the next administration dismantles the law.
In the meantime, the company is sounding a defiant note. "The battle to improve American healthcare was never intended to be a speedy endeavor, and will remain critical despite policy changes," it said. "We’re in this for the long haul."