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Obamacare exploding? Maybe just a slow burn

March 27, 2017
Insurance
Activists protest against the Republican
plan to repeal Obamacare during a rally in
Freedom Plaza in Washington March 23,
2017. REUTERS/Kevin Lamarque
By Caroline Humer and Yasmeen Abutaleb

NEW YORK/WASHINGTON (Reuters) - U.S. President Donald Trump said on Friday that Obamacare was "exploding" after Republican lawmakers shelved legislation that would have dismantled the health care law.

That's not going to happen this month. Probably not even this year.



The more than 12 million people who bought 2017 health insurance plans on HealthCare.gov and other websites the law created are not in danger of losing their health care or having their premiums go up right now, experts say.

But 2018 is another story.

Republicans could choose to pass a budget that defunds Obamacare's cost-sharing subsidies, which help low-income people cover out-of-pocket and other medical costs. But that would be highly unpopular among consumers who would likely blame the president and Congress for skyrocketing health care costs, experts said.

"That is one of the ways that is available to 'monkey wrench' the Affordable Care Act," said Morgan Tilleman, an associate with the law firm Foley & Lardner, which represents insurers.

Obamacare, former Democratic President Barack Obama’s signature legislation created by the Affordable Care Act of 2010, has had a tough beginning. The mix of sick and healthy customers has been worse than expected, and premium rates on the individual insurance market went up 25 percent this year.

Other parts of the law, like the expansion of Medicaid to enhance coverage for the poor, and changes to allow young people to stay on their parents' health plans, have been popular. And the defeat of the bill is a win for the hospitals that have benefited from those increased Medicaid dollars.

But many counties across the country have only one insurer, after Humana Inc., Aetna Inc. and UnitedHealth Group Inc. pulled out, after reporting hundreds of millions of dollars of losses.

The insurers who are left, Anthem Inc. and other BlueCross BlueShield insurers across the country, as well as smaller players like Centene Corp and Molina Healthcare Inc need to decide in the next few months where to sell insurance and how much to charge.

And that is where the market's slow burn takes off, with insurers leaving and premiums rising.

Jeff Jonas, a portfolio manager at Gabelli Funds, who focuses on health care, said that for consumers, 2018 looks uncertain, with a "death spiral" of decreasing competition and increasing premium rates ramping up.

LOOKING TO 2018
After the failed Republican effort to push through the bill, insurers are looking at changes to help 2018, America's Health Insurance Plans spokeswoman Kristine Grow said.

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