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Insurers Fear Latest Chaos Over Health Care

The healthcare industry is not out of the woods yet.

by Alex Seitz-Wald /  / Updated 
Senate Majority Leader Mitch McConnell (R-KY) (C) talks to reporters with Sen. John Barrasso (R-WY) (L) and Senate Majority Whip John Cornyn (R-TX) following the weekly Senate Republican policy luncheon at the U.S. Capitol July 18, 2017 in Washington, DC. McConnell said there are not enough votes for his plan to repeal and replace the Affordable Care Act but he plans on introducing legislation that would simply repeal Obamacare.Chip Somodevilla / Getty Images

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WASHINGTON — Health insurers expressed concern Tuesday over the uncertainty surrounding Senate Majority Leader Mitch McConnell's efforts to repeal the Affordable Care Act and President Donald Trump's most recent call to let Obamacare "fail."

"With open enrollment for 2018 only three months away, our members and all Americans need the certainty and security of knowing coverage will be available and affordable for them," said Justine Handelman, senior vice president for policy at Blue Cross Blue Shield, one of the nation’s largest insurers.

Insurers’ most immediate worry is the federal cost-sharing subsidies they’ve relied on to help make plans in the ACA’s exchanges more affordable. Trump has dubbed those funds "ransom money" and threatened to withhold them to hasten the collapse of Obamacare.

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"Nothing else is as important at this very moment," said Linda Blumberg a health policy expert at the Urban Institute. “If the administration and Congress decide not to pay those obligations, then the implications for the non-group private market could be very devastating.”

Uncertainty about the future of the subsidies has led some insurers to pull out of the exchanges, saying it’s impossible for them to forecast costs. Others have threatened to drastically hike premiums in order to make up for the lost federal funds.

Dayton-based Premier Health Plans said "we cannot effectively plan and price" when they pulled out of the Ohio exchanges in late June.

"Anybody in government or in business knows that stability is really key," Dayton, Ohio, Mayor Nan Whaley, a Democrat, told NBC News on Tuesday. "The uncertainty in the market is because the administration won’t say which direction they’re going."

Time is of the essence, since many insurers have already begun the months-long process of calculating their estimated premiums for next year, which have to be submitted to regulators for approval well before they hit the market.

"The status quo is unacceptable," Dr. David Barbe, the president of the American Medical Association, said Tuesday. “Near-term action is needed to stabilize the individual/nongroup health insurance marketplace.”

After the Senate bill failed, a bipartisan group of 11 governors, including 5 Democrats, 5 Republicans, and one independent, called on Congress to work immediately to "fix our unstable insurance markets."

The governors, like many insurers, favor a short-term solution to secure the subsidies that would leave longer-term issues for another day.

"We remain committed to working with every policymaker and the administration to ensure the short-term stability and long-term improvement of health care in our nation," said Kristine Grow, a senior vice president at AHIP, the leading industry association of health insurance companies.

McConnell signaled support earlier this month for securing the subsidies if repeal fell short. "If my side is unable to agree on an adequate replacement, then some kind of action with regard to the private health insurance market must occur,” McConnell said at a Rotary Club luncheon in his homestate of Kentucky.

But Texas Sen. John Cornyn, the second-ranking Senate Republican, told reporters he wasn’t interested in what he called "bailouts" for insurance companies unless it came with reforms.

Democrats moved quickly Tuesday to say they were open to working with Republicans on minor fixes, with Senate Minority Whip Dick Durbin saying the subsidies were likely the "lowest hanging fruit" for any bipartisan deal, and warning Republicans not to "starve" the ACA by withholding the cuts.

In a letter to Speaker Paul Ryan, House Minority Leader Nancy Pelosi quoted McConnell's comments and said, "In that spirit, we must act before the August recess to address the cost sharing reduction payments issue."

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