President Trump’s and the GOP’s efforts to repeal and replace the Affordable Care Act fizzled out this summer in spectacular fashion. But while the sprawling U.S. health care industry was spared an 11th-hour overhaul, a thick cloud of doubt lingers over the $3 trillion sector. At the center of the storm: insurance companies—and the billions of dollars in subsidies they now receive to cover low-income patients via the ACA. Despite the implosion of the repeal bills, many insurers are nonetheless asking for hefty premium hikes that could throw the system into even deeper disarray.
That would offer an ironic denouement to the Republicans’ seven-year quest to vanquish the ACA—which, as the world knows, sputtered out after three failed Senate bills in about as many days and a dramatic late-night vote, the culmination of a battle that exposed enormous intraparty disagreement and highlighted the unexpected unpopularity of repeal.
There are, to be sure, some in Congress who are fending off this surprise ending—and using a rare weapon to achieve it: bipartisanship. The group’s goal now is to do what the previous GOP-only efforts didn’t attempt—to stabilize the shaky ACA markets rather than kill them.
A crucial Senate health committee has scheduled hearings for September to review a bipartisan framework that would guarantee insurers payments (called “cost-sharing subsidies”) that help reduce low-income Americans’ out-of-pocket medical expenditures, carry on the universal coverage mandate, and incorporate GOP proposals to make more bare-bones plans available as well as repeal certain ACA taxes.
The question now, though, is whether such bipartisan problem-solving may be too little too late. Multiple insurance companies say the uncertainty that continues to surround Obamacare has left them no choice but to seek premium hikes, if they are to remain in the various ACA exchanges. These marketplaces—which enable individuals not covered through their employers or government programs to purchase individual plans—look increasingly unstable as insurers pull out of (or even threaten to leave) them.
This time last year, insurers on the individual markets were on “a path toward regaining profitability in 2017,” according to the nonpartisan Kaiser Family Foundation. It’s an open question whether that will still be the case in 2018.
Despite the recent show of bipartisanship, some Republicans in Congress have vowed to resist any attempt to rescue the law. President Trump has, likewise, repeatedly threatened to cut off the cost-sharing subsidies to insurance companies—which alone would send premiums up 20%, according to an August CBO report, and increase the deficit by $194 billion over 10 years.
Indeed, that’s already happening in sporadic cases—and may accelerate soon. In early August, Anthem announced it was cutting back sharply on its participation in Obamacare exchanges in several states, lamenting that “planning and pricing for ACA-compliant health plans has become increasingly difficult due to a shrinking and deteriorating individual market.”
Other major insurers have made similar statements to explain double-digit premium increases. The takeaway? What seems like costly uncertainty now could get a lot more chaotic before the year is out.
Obamacare, by the numbers
10.3 million: The number of Americans as of mid-March who were enrolled in and paying for an Obamacare exchange plan, instead of procuring insurance through an employer or separate federal program.
49%: The highest requested premium increase across 21 major cities for a benchmark ACA exchange “Silver” plan in 2018. Many others had double-digit hikes. At least one insurer, though, did lower its premium by 5%.
23%: The average additional level of premium increase requested by Idaho’s PacificSource Health Plans (on top of a regularly planned 23% hike), due to threats to cut off insurer payments.
7 million: Americans who, in 2017, qualified for the cost-sharing subsidies currently under siege. The subsidies, paid to insurance companies, vastly lower patient deductibles and out-of-pocket costs.
A version of this article appears in the Sept. 1, 2017 issue of Fortune with the headline “Obamacare’s Thousand Cuts.”
