In an article last week looking at the health of the state insurance marketplaces set up by the Affordable Care Act, I wrote about why Iowa’s was in a dire situation. Three of its insurers recently said they may exit the Obamacare marketplaces, which threatens to leave tens of thousands of people with no way to buy the subsidized insurance promised by the law. The situation there is actually far more tenuous and could be a glimpse of what’s to come in other states. In 94 of Iowa’s 99 counties, insurers have said they may not sell new plans on the individual market at all, even outside the subsidized markets set up by the ACA.
This is a serious concern for people who buy insurance on the individual market, because as Congress debates how to repeal and replace the ACA, just about every policy scenario assumes that the individual markets will continue to exist through 2018. And although the markets were already in trouble in some places, the White House’s decision not to take actions that could stabilize them could continue to scare off insurers, resulting in more states facing a situation like Iowa’s.
People who don’t get health insurance from an employer or qualify for a public insurance program such as Medicaid or Medicare have long turned to the individual market to buy plans. Obamacare set up open marketplaces where these people could receive subsidies to buy insurance if they qualified based on income. But many insurers also sold individual plans outside of the ACA marketplace to people who didn’t qualify for subsidies.
Insurers have pulled out of other state marketplaces, too, as ACA markets in those places have struggled. In a couple of cases, all of a state’s insurers have threatened to leave the subsidized markets. Counties in Arizona and Tennessee were nearly left with no insurers on their ACA marketplaces, which would have made it impossible for people to receive the subsidies promised by Obamacare. But in Iowa, there may be no insurers selling individual plans for next year at all, with or without subsidies. That would leave tens of thousands of people unable to buy health insurance at any price.
Iowa is an outlier, but it may not be for long. The Trump administration has consistently indicated that it plans to do little to stabilize the markets, avoiding basic questions about whether it will continue making payments to insurers that were written into the law but never funded by Congress. On Monday, the administration and the House once again pushed off the issue, requesting a 90-day extension on a court case related to the payments that started during the Obama administration. That means it could be late August before the suit comes up again, well after health insurers are required to file information about what plans they’ll offer on the ACA marketplaces or most other state insurance platforms in 2018.
For months, insurers and policy analysts have warned that the Trump administration’s actions and inactions will likely cause an increase in premiums. But they’re also likely to scare insurers out of some markets altogether. On Friday, several large medical and insurance organizations wrote to senators about the problems this uncertainty is causing in the individual market: “There now is clear evidence that this uncertainty is undermining the individual insurance market for 2018 and stands to negatively impact millions of people.” And the closer we get to 2018, the less likely it is that a company will be willing to step in and fill the void in places where all the insurers had previously decided to pull out. President Trump has frequently said that he would be better off politically if he let the markets fail, under the theory that the ACA’s collapse would put pressure on Democrats, though polls suggest that the public plans to hold him and congressional Republicans accountable for that kind of implosion. He’s edging closer to letting that happen.