Washington, D.C. — The Center for American Progress published a new analysis today that addresses how insurance markets would react should congressional Republicans move to repeal much of the Affordable Care Act, or ACA, by reconciliation under a Trump administration. CAP’s issue brief examines how last year’s ACA reconciliation bill—which was vetoed by President Barack Obama but could be revived by a Republican-controlled Congress and White House—would cause massive disruption and chaos in the individual market for health insurance at the end of 2017, even if the bill’s implementation is delayed until a later date.
“Repeal by reconciliation would be disastrous for the health and financial security of millions of Americans and would unravel historic progress toward the important goal of universal coverage,” said Topher Spiro, Vice President for Health Policy at CAP. “It would do so much sooner than congressional Republicans expect and well before any replacement plan is in place. If congressional Republicans pass a repeal bill that kicks the can on replacement, they will own the effects in 2018 when insurers drop out due to uncertainty.”
Proponents of repealing the ACA may argue that delaying the date at which key provisions kick in would provide enough time for a smooth transition, but CAP’s analysis explains why this is a fallacy. Insurers are already, or soon will be, making business decisions and preparing premium rates for 2018. Given the premium rate filing timeline, President-elect Trump would have to take the reconciliation approach off the table by May 3 of next year. If the fate of the ACA is still in limbo at that time , then few insurers are likely to take the risk amid such uncertainty.
“Think of ACA repeal first, replace later like musical chairs. When the music stops, no insurer wants to be the one with the sick enrollees,” wrote Larry Levitt of the Kaiser Family Foundation on Twitter.
Furthermore, the issue brief addresses a major problem of a reconciliation bill: keeping consumer protections but without the premium tax credits or individual mandate penalties. This would cause a death spiral in the individual market.
Read the full issue brief, “Republican ACA Repeal Bill Would Unravel the Market Even Before It Goes into Effect” by Topher Spiro and Thomas Huelskoetter, online here.
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