After Demise Of GOP Health Care Bill, Insurance Companies Wonder What's Next

With the demise of Republican efforts to both repeal and replace the Affordable Care Act, there's likely to be an impact on consumers and companies that depend on the health care law.

ROBERT SIEGEL, HOST:

Republicans' efforts to follow through on their campaign promise of overhauling the Affordable Care Act have collapsed. First, four Republican senators went against their party's leaders, saying they would not vote to even debate the bill to replace Obamacare. Now Republicans are thwarting Senate Majority Leader Mitch McConnell's fallback plan. That was to simply repeal the health care law now and replace it later. Well, what does this chaos in Washington mean for the U.S. health care system? NPR's Alison Kodjak is here to tell us. Hello, Alison.

ALISON KODJAK, BYLINE: Hi, Robert.

SIEGEL: Today, President Trump, standing alongside Vice President Mike Pence, said he plans to let Obamacare collapse.

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PRESIDENT DONALD TRUMP: I've been saying that - Mike, I think you'll agree - for a long time. Let Obamacare fail. It'll be a lot easier. And I think we're probably in that position where we'll just let Obamacare fail.

SIEGEL: Alison, President Trump says we'll let Obamacare fail. First of all, do you understand what it means for Obamacare to fail at this point?

KODJAK: Yeah, this is the so-called death spiral. So what would happen is insurance premiums would be a little bit too high for a lot of people to buy a policy if they don't really need it. So the healthier people would drop out. Sick people would continue to buy insurance. But then their costs would go up, and then the insurance companies would raise premiums. And then more people might drop out. And it would cause this spiral of upward prices. And eventually, nobody would be buying insurance because nobody would be able to afford it.

SIEGEL: And when President Trump says we'll let that happen, can he do that either by action or by inaction?

KODJAK: Well, they seem to be helping it along. They've been refusing to say whether they're going to enforce this individual mandate. That's what makes young, healthy people buy insurance, because there's a threat of a fine. Those people, if they buy insurance, keep the premiums lower. And they're also refusing to say whether they'll make these controversial cost-sharing payments. They reimburse insurance companies for discounts that they're required to give to low-income customers. So by doing these two things they're actually making the markets weaker. If he just left the law in place and he enforced the mandate and he made those payments, the experts I talked to say the markets would be in pretty good shape.

SIEGEL: Well, then why are the insurance companies dropping out of Obamacare markets? And why are premiums rising?

KODJAK: There's this uncertainty about what's going to happen. Insurance companies don't want to commit to selling policies unless they're fairly sure they're going to have a decent customer base. But for a little perspective, there are about 38 counties out of more than 3,000 that are at risk of having no options next year. It's a relatively small number of people, but it's become a big political issue. In the past, in those bare counties an insurance commissioner or the Health and Human Services secretary might have intervened to convince a company to enter the market. That may not happen this year, so it's unclear what's going to happen in those counties that don't have anybody right now signed up to sell policies.

SIEGEL: Well, should we expect any changes to Medicaid now that there's not a new replace bill that's going to be passed?

KODJAK: Yeah, Medicaid was a big part of the controversy on these bills. But right now nothing changes. The Medicaid expansion that happened as part of the Affordable Care Act, that's going to stay in place. And the big plans to overhaul Medicaid that were part of the Senate and the House bills are gone. But the question now is whether other states are going to pursue Medicaid expansion. There were a few that were looking into it before the election, and we don't know if they're going to now get back on the bandwagon.

SIEGEL: And what are the insurance companies saying now?

KODJAK: Well, the insurance companies really want stable markets. And all along they've been making the case that these cost-sharing payments that I talked about have to be paid and that the government has to guarantee that they're going to be paid. And also, they want the individual mandate to be enforced. And so they said last weekend that the bill that was being considered would really disrupt the market. So they've made clear what it is they want. Today I haven't heard too much about what they're saying now that that bill has collapsed.

SIEGEL: That's NPR's Alison Kodjak. Alison, thanks.

KODJAK: Thanks, Robert.

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