“I don’t think anyone in our caucus wants to pull that rug out from underneath people,” said Sen. Ron Johnson (R-Wis.). “You also have to recognize what a disaster Obamacare has been.” | AP Photo GOP will kill Obamacare … and then fund it After railing against insurer 'bailouts,' Republicans may have to offer something similar to prevent chaos while they craft a replacement.

Republicans are going to kill Obamacare — but first they might have to save it.

The already fragile Obamacare markets — beset by soaring premiums and fleeing insurers — are likely to collapse unless Republicans take deliberate steps to stabilize them while they build consensus on a replacement plan, say health care experts. That could lead to a mess for the roughly 10 million Americans currently getting coverage through the government-run marketplaces — and backlash against the GOP.


“It’s basically a hostage situation,” said Jeff Goldsmith, a veteran health care consultant. “They’re going to have to negotiate something that is safe enough for these insurance companies to tell their boards, ‘We’re not going to get hung out to dry if we provide coverage to these people.’”

But the enticements most likely to keep insurers in the exchanges are the ones in Obamacare that Republicans spent years denouncing as industry “bailouts” — subsidies that were supposed to insulate plans from big losses.

Whether Republicans are willing to pay for that, or some other sweetener, simply to preserve the exchanges for another few years is a political conundrum that could blow up in their faces if they play it wrong.

After more than six years of vowing to dismantle the federal health care law, Republicans are finally in a position to make good on that promise. But firing up the base with rhetorical broadsides against Obamacare is easy. Actually dismantling a system that has provided coverage to 20 million Americans and led to the lowest uninsured rate in the country’s history is a path filled with political minefields.

“It’s not going to be politically possible to throw 20 million people out on the street without health insurance,” said John Goodman, a right-leaning health care policy analyst.

Many Republicans have acknowledged the challenges in recent weeks as they’ve plotted the course forward with full control of the federal government. They remain committed to repealing the law early next year, but now plan to delay implementation of a replacement for two or three years while they try to craft something that won’t create greater turbulence in the health care system. But there are vast disagreements within GOP circles about the exact timeline and what should come next.

Republicans insist that they will take whatever steps are necessary to protect Obamacare customers from harm. Sen. Bill Cassidy (R-La.), a medical doctor who has introduced an Obamacare replacement package, holds out a constituent recently diagnosed with cancer as a touchstone.

“We just need to focus on making sure that she doesn’t get lost,” Cassidy said Tuesday. “If we do that, it could take a variety of mechanisms. One might be to stabilize the exchanges. … Or it might be another mechanism that someone has not yet raised. … The only thing I am not open to is not taking care of her as she struggles with her illness.”

Still, it’s unclear how long such patience may last.

“I don’t think anyone in our caucus wants to pull that rug out from underneath people,” said Sen. Ron Johnson (R-Wis.). “You also have to recognize what a disaster Obamacare has been.”

But the most obvious option available to Republicans — some form of subsidy to cushion insurers from losses — has been repeatedly pilloried by GOP legislators. Arguably their biggest blow against the Affordable Care Act was a budget maneuver that resulted in a more than $8 billion shortfall in those payments to health plans.

“It would be politically somewhat difficult to turn around and say, ‘By the way, we need those things for a couple of years while we figure out what to do with the ACA,’” said Lanhee Chen, a research fellow at Stanford University’s Hoover Institution, and policy director for Mitt Romney’s 2012 presidential campaign. “People may see that as a little opportunistic.”

Many Republicans would prefer to argue the Obamacare markets were already in their death throes before they took charge — the question is whether they can get away with it.

“The first question I think they’re trying to figure out is, do we actually own it for 2018?” said one health care lobbyist, speaking on background. “If premiums spike and plans exit, can we still blame it on Obama and get away with it? That’s one of the threshold questions that I don’t think they’ve answered.”

Chris Condeluci, who was a top Republican staffer on the Senate Finance Committee when Obamacare was drafted, thinks Republicans are fooling themselves if they believe they can avoid fallout from a marketplace collapse. Failing to take action to fix a failing policy, even one that was passed entirely with Democratic votes, isn’t a sensible option to his thinking.

“The voters gave you a mandate,” said Condeluci, who now runs his own health care consulting firm. “Why not stabilize [the exchanges] and live to fight another day?”

While no GOP blueprint for steadying the exchanges has emerged, the range of likely options is limited. The new administration can make regulatory changes that insurers have been clamoring for — most notably cracking down on ways they say some Obamacare customers have gamed the system. Some minor legislative fixes might help, such as shortening the grace period during which customers can still get coverage even if they’re delinquent on premium payments.

On Tuesday, America’s Health Insurance Plans recommended changes to Republicans as they craft a replacement plan. Most strikingly, the industry group indicated it might be willing to support dropping the individual mandate — which Republicans loathe — if other steps are taken to encourage Americans to enroll in coverage.

But the most likely means of reassuring jittery insurers will undoubtedly include some of those same risk mitigation programs that Republicans have relished denouncing. And that’s unlikely to sit well with conservatives.

“Funneling more taxpayer subsidies to insurers, I don’t think that that’s the answer,” said Alyene Senger, a health policy analyst at the conservative Heritage Foundation, which is playing an influential role in President-elect Donald Trump’s transition planning.

However, that stance may be trumped by the realities of a fragile marketplace.

“It would be difficult for them to do it, but now they’re in charge,” said James Capretta, a resident fellow at the right-of-center American Enterprise Institute. “They need to do what they need to do to try and stabilize the situation.”

The most immediate issue Republicans have to navigate is what to do about cost-sharing subsidies that limit out-of-pocket expenses for the poorest exchange customers. House Republicans filed a lawsuit challenging the administration’s authority to fund the program and won an initial court battle. The case is currently being appealed, but it is unclear how a Trump administration will proceed.

If those subsidies go away, that is likely to have insurers flooding to the exits. That’s because they would still be on the hook to provide the financial assistance to their customers, but would get no government reimbursement.

“The prospect of losses and increased solvency risks could lead to insurers opting to withdraw, leading to severe market disruption and loss of coverage among individual market enrollees,” wrote Shari Westerfield, vice president of the American Academy of Actuary’s health practice council, in a letter to House Speaker Paul Ryan on Wednesday.

Pretty much everyone agrees that Republicans will pay a price if that’s the end result of their initial foray into fixing Obamacare. That’s why they’ll ultimately need to come up with some means of stabilizing the markets as they try to reach consensus on a new approach.

“Politically it’s a must,” Senger said. ”I don’t think anyone wants to snatch coverage away from people and leave them in limbo until a replacement gets implemented.”

Jen Haberkorn contributed to this report.