'Repeal now, replace later' has immediate effects on consumers

WASHINGTON -- Consumers would feel the impact immediately if Republicans repeal "Obamacare" with no replacement.

Problems could start this fall for customers buying individual health policies, said independent experts, with more insurers likely to exit state markets around the country, and those remaining seeking higher rates.

Low-income people who qualified for expanded Medicaid expansion under the Affordable Care Act, or ACA, might be shielded for a year or two. But then federal funding for their coverage would stop and states would have to decide whether to keep those able-bodied adults on the rolls.

Though the latest approach seems doomed to fail, Senate Majority Leader Mitch McConnell insists he'll move to a vote.

Meanwhile, President Donald Trump has floated another idea: to "just let Obamacare fail." But that also could backfire, because his administration is unlikely to escape at least some of the blame.

With no good options for Republicans, here's a look at the potential consequences for consumers:

'Recipe for chaos'

The repeal bill McConnell is contemplating would not fully repeal the 2010 law enacted under President Barack Obama, and that starts creating problems immediately.

The ACA requirement that individuals carry insurance would disappear right away. That would be followed in two years by the tax credits that help individuals pay their insurance premiums, as well as the money to subsidize state coverage for adults eligible for expanded Medicaid.

But ACA rules that make insurance more costly would remain in place for the foreseeable future. Those include protections for people with pre-existing conditions, standard benefits and a limit on how much insurers can charge older adults.

That head-scratching outcome would stem from Senate rules that limit the kinds of "Obamacare" provisions Republicans can repeal with just 51 votes.

"It's a recipe for chaos," said Larry Levitt of the nonpartisan Kaiser Family Foundation. "It's worse in terms of coverage and premiums."

Combine that with uncertainty about the Trump administration's intentions, and "there would be an increased number of insurers exiting the market, leaving more counties without any coverage," Levitt said.

Conservative policy expert Jim Capretta of the American Enterprise Institute doesn't see it as a good move, either.

"The insurance markets would become quite a bit more unstable in the near term," Capretta said. "Even before the subsidy structure is fully withdrawn, the uncertainty would probably unravel the thing."

'Let it fail'

If Congress can't get it done, Trump is suggesting maybe the answer is to "just let Obamacare fail."

That might get Democrats clamoring for action, he said, and a deal finally might be in sight.

But not all of "Obamacare" is teetering. Medicaid expansion in 31 states basically operates on autopilot. And private insurance markets are stable in most areas, albeit with less consumer choice.

Finally, voters might not blame Obama for the problems and instead turn their ire on Trump and the Republicans.

Insurers said their major worry is the reluctance of the White House and Congress to guarantee billions of dollars in "cost-sharing" subsidies that help cover deductibles and copayments for low-income consumers.

In the past, Trump has suggested withholding the money to force Democrats to negotiate, but his administration has continued to make subsidy payments to insurers from month to month.

Some insurers have cited the lack of a guarantee on the subsidies as a factor behind requested premium increases for next year.

BlueCross BlueShield of North Carolina blamed the problem for most of its nearly 23 percent premium increase for 2018. With a guarantee Washington would continue honoring the subsidies, the insurer said it would have sought a hike of just under 9 percent.

Insurers make their final decisions for 2018 by the end of September.

"With open enrollment ... only three months away, our members and all Americans need the certainty and security of knowing coverage will be available and affordable for them," said Justine Handelman, top Washington lobbyist for the BlueCross BlueShield Association. "We have consistently urged that there be immediate, certain funding for the cost-sharing reduction program."