Think Tank

Podcast: ‘What The Health?’ No Vacation For Insurers

With open enrollment looming in the fall, insurers selling coverage in the Obamacare exchanges face some hard questions as key deadlines fast approach.

They must finalize their 2018 prices as soon as next week, then need to commit by the end of September whether they are in — or out — for next year. And they must do those things amid the considerable uncertainty that swirls around them.

Insurers still don’t know whether the Trump administration will continue paying them for the discounts they are required to give low-income customers on copays, deductibles and other out-of-pocket expenses. And they can’t be entirely certain the executive branch will enforce the mandate requiring most people to buy insurance — without which, individual market health plans could become overburdened with sick, expensive enrollees.

But there may be grounds for cautious optimism: In some states where there is not a single health plan selling on the exchange, some insurers say they are willing to fill that void, though perhaps out of self-interest.

In this week’s “What the Health?” podcast, Julie Rovner of Kaiser Health News, Joanne Kenen of Politico, Sarah Kliff of Vox.com and Margot Sanger-Katz of The New York Times discuss these topics and ruminate on the possibility of a bipartisan path forward.

The following transcript has been condensed and edited for clarity:

ROVNER: Congress and President Trump are finally gone for their August vacations, a little belatedly in some cases, and now we have a little bit of room to breathe — but not so much if you’re an insurance company that sells individual health policies on the health exchanges. We have a whole bunch of deadlines coming up. Who wants to talk about what has to happen and when?

KLIFF: A lot has to happen. … Insurance companies need to finalize their prices by mid-August. [There’s an] Aug. 21 deadline for the federal marketplace, healthcare.gov. Then by the end of September, insurance companies have to make that final call: Do they want to sell coverage on the marketplaces or not? I believe it’s Sept. 27 — the deadline for healthcare.gov — and around that for the state marketplaces. It’s a hard decision, and we’re just starting to see the effects of uncertainty on premiums. Health insurance companies are in many cases pricing without the [cost]-reduction subsidies we’ve talked about before. They’re pricing assuming the individual mandate … might not be strongly enforced. So the uncertainty is real; it’s having an effect on prices.

ROVNER: So what do we know about what they call the “bare” counties, where there’s no insurer offering coverage on the exchange?

KLIFF: I think it’s actually an encouraging story right now in the bare markets, where you’re seeing insurance companies come in. We just saw last week in Ohio [that] one company wanted to cover 19 or 20 bare counties. So it seems to be the case that very few if any people will be living in areas without insurance companies. But, a lot of people are going to be living in places with just one insurance company selling coverage. So this vision that the drafters of Obamacare had that it would be this competitive marketplace, like Expedia … doesn’t even exist anymore.

ROVNER: I think there are some companies who [think] it would be great to be a monopoly insurer in a place coming in. But my big question is: What happens if we get to the end of September and they have to sign those contracts and then they suddenly all say, “No, we can’t do this”?

SANGER-KATZ: I was speaking with Cynthia Cox yesterday, who is one of the authors on that Kaiser report that aggregated what’s happening with premiums in, I think, 20 cities, and she said it’s a little bit too late for there to be much movement on premiums. You could see them go up or down a little bit as insurers negotiate with their regulators, but they don’t really have the time to go back and do soup-to-nuts recalculations. But the binary choice of “in or out” — that is something they really can decide until the very last minute. So I think if something really weird happens in the policy universe between now and the end of September, it’s not unreasonable to think that some of these insurers might decide to jump ship.

If the cost-sharing subsidies are pulled this year, which is what President Trump has been threatening to do, the insurance companies are already locked into their premiums for this year and they could lose a lot of money even in just the last couple of months of this year. I also think it would be seen as a huge violation of trust: The whole system depends on this public-private partnership between the insurers and the federal government.

ROVNER: Let’s talk about where we are on the cost-sharing reductions. For those who haven’t been listening, these are the discounts that insurers are required to give to people under 250 percent of poverty on their out-of-pocket costs. And there’s a legal fight about whether Congress ever appropriated the money. We’re at a place where it appears — or at least until last week it appeared — that the administration could simply stop paying those subsidies. But … we’ve had a change since the last time we talked, and the [state] attorneys general are entering this lawsuit. So where exactly are we on the administration’s ability to just stop making these payments?

KLIFF: I think it’s certainly much harder now. What happened last week is that a number of attorneys general who generally are Democrats, elected officials, won an argument to be allowed to defend the reduction subsidies if the Trump administration were to say, “We don’t defend this part of the law … we think this is illegal and will stop paying them.” Democratic [attorneys general] made the argument that, “We could be negatively affected. We have standing.” And I think that makes it much harder.

ROVNER: The thing that we do seem to be seeing is some tentative moves to bipartisanship.

KLIFF: I was really interested yesterday in this report … that came out from this kind of odd bedfellows coalition of health policy wonks. A group [of people] I did not expect to see on the same paper. People like Ron Pollack, who founded Families USA [and is] a key advocate for the Affordable Care Act; Lanhee Chen, who’s been an advocate for some of the Republican replace plans and was Mitt Romney’s 2012 health policy adviser. Yeah, I never expected to see those two on the same policy document. But they got this group together, and Gail Wilensky, President [George H.W.] Bush’s former Medicare chief, [and] they had some recommendations. And that was a really notable step to me because … it struck me as a kind of important low-key step towards a bipartisan package.

KENEN: I thought what was also interesting is an earlier version of that set of proposals came out four to six weeks ago. There was a Hoover Institution paper. There was a Wall Street Journal op-ed, but at that point it was all repeal, repeal, repeal. We were focused on the Senate. … The fact that they re-released it and got a lot more attention shows that the ground has shifted and you can at least have a conversation about a bipartisan opening. These are big names in health care. These are respected people. They’re not necessarily people who agreed on things in the past, and they are coming together and saying, “OK, if we’re going to be bipartisan — and it is time to be bipartisan — here’s a road map that you might at least want to begin with.” And it was very much aimed at the Senate Health [Education, Labor and Pensions] Committee.

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This story was produced by Kaiser Health News, an editorially independent program of the Kaiser Family Foundation.