As Republicans are planning to repeal and replace the Affordable Care Act, insurance companies are warning the public of the tragedy that awaits once Obamacare is dismantled.
Earlier this week, the Senate passed a budget resolution that proclaims the best way to “take a chunk out of the federal budget deficit is to defund Obamacare.” The so-called ‘resolution’ is set to come to a vote in the House on Thursday, and chances are the House will pass it there, too–despite the fact that Republicans have no replacement plan lined up, basically telling us all that they could careless about the millions of people who will be effected by this outcome.
Nevertheless, insurance companies are completely fed up with the GOP, and do not find it rational nor beneficial for Americans, to completely wipe out Obamacare.
“Obamacare has plenty of critics, butscrapping it in its entirety is rash and will benefit few—particularly not the over 20 million people who didn’t have healthcare coverage before it was enacted. But what seems to be in the process of happening now—-cutting off the programs’ money without changing the underlying regulations—is kind of even worse. For all the talk of how they’d benefit from a truly free market, not even health insurance companies make out well on this one. No business likes an unstable market, and Republican lawmakers are in the process of creating just that: a sudden lack of subsidies could cause some healthy customers to opt out, leading to an insurance landscape flooded with (high-risk) sick people staggering under the burden of increased premiums. Advantage, nobody.”
So, what would exactly happen if Congress decides to repeal and replace? It all depends on what the actual replacement plan is–which President-elect Trump has failed to mention. Apart from that, this not an ideal situation for insurance companies, or insurers themselves. Dow, and top-ranked health economist explain this perfectly:
“If they remove the subsidies and lower the individual mandate tax penalty to zero, it could lead the individual market to unravel,” Dow says. Why? It could lead to high rates of what experts call adverse selection, which basically amounts to having more sick people in your pool than healthy ones. “When the pool is less healthy, the premium is higher,” says Paul Ginsburg, a health economist at USC’s Sol Price School of Public Policy and Brookings. Under Obamacare, the insurance mandate and subsidized lower premiums kept healthy people on the wagon. If Obamacare’s replacement doesn’t deal with the adverse selection problem, insurers will have to raise their premiums to cover the risk posed by having a higher proportion of sicker, costlier people. “Healthy people will drop out,” Ginsburg says. “This is going to do an amazing amount ofcollateral damage.”
Now that Republicans have completed step one of their three-step plan to kill Obamacare, it may evidently, cause more harm than good. Insurance companies are equally hesitant of the risk Republicans are about to take. For now, the GOP is prompting an easy solution: Don’t get sick because you’re screwed. And as Dow puts it: “The overall losers here are the sick people.”