Republicans warned for years that Obamacare would blow up the nation’s individual insurance market. Instead, their own rush to repeal the health care law may be what triggers that death spiral.
GOP lawmakers say they plan to repeal the Affordable Care Act as soon as President-elect Donald Trump takes office, including a transition period of a year or two before it takes effect. That way, they satisfy their base while giving notice to 20 million Obamacare customers that they must find other coverage options.
But repealing the law without a replacement is likely to spook health insurers, who might bolt from the markets prematurely to avoid losses as some people stop paying their premiums, while other people rush to have expensive medical procedures before losing coverage. Insurers would have little incentive to stick around without knowing what to expect at the end of the transition. And that could spell chaos for consumers.
“The discussion right now about repeal and replacement is making the market very, very nervous,” said Washington Insurance Commissioner Mike Kreidler, a Democrat. “I would not be surprised to see the potential for a stampede to exit the market.”
Even if Congress delays immediate action to kill the health care law, Obamacare insurers would have just a few months to decide whether to stay in the law’s marketplaces for 2018. Deep uncertainty about the Republicans’ Obamacare replacement could drive out those companies, cutting off insurance for, potentially, millions of customers.