Insurers are preparing for Obamacare customers double-digit rate increases to be announced in coming months, handing Republicans a key talking point as they try to persuade voters to accept a repeal of the 2010 health care law.
The people signing up for Obamacare so far are sicker than expected, meaning insurers will have to raise rates to cover the costs, in what nonpartisan analysts said amounts to a “market correction.”
Even as insurers grapple with a most costly population, they are about to lose some of the supports built into Obamacare that have helped mitigate their losses in the first couple of years of operation.
“That could result in many insurers having rate increases that exceed 10 percentage points,” said Cynthia Cox, associate director of health care reform and private reform at the nonpartisan Kaiser Family Foundation.
President Obama insists the Affordable Care Act is working and hopes a Democrat will win the White House in November and preserve the law.
But Republicans say the cracks already are showing. They point to signs such as UnitedHealth Group’s decision to stop offering plans in many state markets as proof that the law’s economics are collapsing.
“I think that Obamacare is going to be a huge issue in this campaign. The next couple of months in particular are going to be quite tough for the law,” said Lanhee J. Chen, a Hoover Institution fellow who advised 2012 Republican presidential nominee Mitt Romney on health care.
Whether Republicans will capitalize, though, is in doubt.
Obamacare exchange customers don’t have to begin signing up for next year’s coverage until Nov. 1, so rate shock won’t hit until days before the election at the earliest.
Also, Republicans’ pledge to come up with a replacement plan for Obamacare could be hitting the skids.
House Republicans are working on an alternative as part of Speaker Paul D. Ryan’s series of task forces to build a “bold, pro-growth agenda” for the party to take into the November elections.
“We are on track,” Ryan spokesman Brendan Buck said. “This law continues to demonstrate that is a failure, and we will offer the country a better way to provide a patient-centered health care system.”
Yet de facto Republican presidential nominee Donald Trump said Thursday that he is “not ready to support” Mr. Ryan’s agenda, a frosty rebuke to the House speaker’s acknowledgment to CNN that he wasn’t ready to back the real estate mogul as his party’s standard-bearer.
The two men are scheduled to meet at Republican National Committee headquarters on Thursday.
While Mr. Trump has vowed to scrap Obamacare, his previous support for single-payer health care has unnerved some conservatives, and he has already broken with Mr. Ryan over health care entitlement reform through changes to Medicare.
“I think the challenge with Trump is he has not really told us what it is he would do with health care,” Mr. Chen said. “He would do very well if he adopted whatever plan Speaker Ryan comes up with.”
It is also unclear how many votes will hinge on health care reform. A Kaiser poll from April says registered voters want the presidential candidates to talk about the economy and jobs, national security, and immigration and border control before they discuss health care.
On Obamacare, the poll said more than half of Republican voters (56 percent) want full repeal, while a majority of Democrats (51 percent) want to expand the law.
“It’s hard to believe there will be a huge number of voter conversions on the issue,” said G. Terry Madonna, a politics professor at Franklin and Marshall College in Lancaster, Pennsylvania. “The approach by Republicans on the rising cost will have a marginal effect — not a bad strategy, but more important will be their plan and its pros and cons, since that’s likely to be a major bone of contention.”
Rep. Fred Upton, Michigan Republican and chairman of the House Energy and Commerce Committee, has said the Republican approach will reduce costs and increase choices for patients, bolster competition among insurers and help vulnerable Americans with targeted assistance, while scrapping Obamacare’s mandates and Byzantine coverage requirements.
Democrats and their supporters say whatever Republicans propose, it won’t cover all 20 million Americans who have gained coverage through Mr. Obama’s law.
“While Donald Trump and Paul Ryan fight it out and get nothing done, Democrats are focused on continuing the success of the Affordable Care Act and working to make it better. No one will fight harder than [Democratic presidential front-runner] Hillary Clinton to do that,” said Justin Barasky, a spokesman for the progressive Priorities USA group that already plans to attack the Trump campaign with $91 million in television advertising.
In the meantime, the Department of Health and Human Services has tried to temper any blowback from insurers’ 2017 rate requests by releasing a report that “debunks the myth” that initial filings are a good indicator of what consumers actually pay. Exchange coverage cost just 4 percent more, on average, in 2016 than 2015 among customers who qualified for taxpayer subsidies.
“Averages based on proposed premium changes are not a reliable indicator of what typical consumers will actually pay because tax credits reduce the cost of coverage for the vast majority of people, shopping gives all consumers a chance to find the best deal and public rate review can bring down proposed increases,” HHS spokesman Benjamin Wakana said.
Those caveats haven’t stopped Republican candidates from using rate shock as a weapon against their opponents.
Florida businessman and Republican Senate contender Carlos Beruff challenged two of his potential Democratic rivals, Reps. Alan Grayson and Patrick Murphy, to explain the expected increases last week, even though the state’s party primaries are months away.
“Voters in Florida deserve to know how the Democratic candidates for Senate defend these rate increases,” Mr. Beruff said. “It’s clear Obamacare is not working.”