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What’s Going on With the ACA?

There has been some good and bad news for the future of Obamacare.
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While the Congressional recess has brought a much-needed respite from the spectacle of the Affordable Care Act’s repeal-replace-reform debacle, new reporting from CNN seems to indicate that the drama will resume when lawmakers return next week.

During a speech in Wisconsin earlier this week, President Donald Trump said he still wants to accomplish health-care reform, even before he takes on tax reform. Vice President Mike Pence confirmed this commitment on Wednesday when he told CNN he’s “very confident that, in the days ahead, we’re going to see the Congress come together and we’re going to take that important first step to repeal and replace Obamacare with the kind of health-care plan President Trump has envisioned.”

The president’s and vice-president’s comments are the latest in long history of hand-wringing over the ACA, particularly its non-group insurance exchanges. Despite the GOP’s failure to repeal the law, the ACA remains at risk.

First, some encouraging news for ACA proponents: Earlier this month, S&P Global Market Intelligence published an analysis of the health of the ACA’s marketplaces. The analysis concluded that, while the “market is still developing and will need a couple more years to reach target profitability,” 2016 was financially a better year for most insurers than 2015. S&P predicts that, assuming “business as usual,” enrollment in 2018 will be slightly higher than in 2017, and premiums will increase slightly (but by much less than they did in 2017). The report concludes that “2016 results and the market enrollment so far in 2017 show that the ACA individual market is not in a ‘death spiral.’” In other words, the non-group markets in most places will slowly improve and stabilize.

Now for some not-so-good news: Thanks to insurerexits, there are a number of counties in Tennessee and Iowa that may be at risk of having no insurers participating in the ACA exchanges in 2018. This is obviously detrimental for those affected counties. As Vox’s Sarah Kliff succinctly reports: “There is no backup plan for places where no insurer wants to sell Obamacare coverage.” (This, by the way, would be a great time to have a public option around.)

And here’s the worst news: Insurers, already in the process of making decisions about whether to participate in the marketplaces next year, have reportedly grown increasingly alarmed by the mixed signals coming from the GOP and the Trump White House. Last week, the president threatened to use the cost-sharing subsidies the government pays to insurers as a bargaining chip to force Democrats to negotiate with him. If the White House does actually withhold the subsidies, the consequences for the market would likely be devastating. Here’s what Larry Levitt, of the Kaiser Family Foundation, had to say on the topic in a recent post at the JAMA Forum:

If the federal government stops making the payments to insurers, they would be forced to raise marketplace premiums to cover the difference (an estimated 19% increase). Or, more likely, insurers would see the move as a signal that the administration is looking to undermine the marketplaces and just exit the market altogether.

It turns out there’s more than one way to destroy Obamacare.