START OF 2018 OPEN ENROLLMENT PERIOD

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Reminder: Trump could still potentially destroy the individual market...next month.

The CEO of Molina Healthcare made it about as clear as he possibly could today:

Molina Healthcare CEO: GOP's 'piecemeal approach' to health-care reform will lead to a 'health-care disaster'

With the GOP's failure to repeal Obamacare last month, House Speaker Paul Ryan refused to give a time line for a new bill.

...But many health-care providers are wary of the fast pace the GOP seems to be taking with repealing Obamacare.

...Molina is particularly worried about the potentially higher premiums and misleading packages insurance companies can price and sell.

"Well, what worries me is it allows insurance companies to charge much higher premiums for people with preexisting conditions and at the same time, by changing the essential health benefits, insurance policy companies offer packages at a lower price, which theoretically will appeal to younger people," Molina said. "The problem is, those people find out when they get sick, the insurance premium and the package they purchased do not cover their sickness or the treatment needed or the medications."

..."They need to fund the CSRs for the next two years to buy Congress the time to come up with some reform legislation," Molina said. "If they don't do that, the individual market collapses, and that would be terrible for the country. It would be terrible for people buying individual insurance, and it would be a black eye for the Republicans."

The urgency of the CSR situation doesn't seem to be getting through to some people in Trump's administration (or, perhaps it is getting through to one person in particular), as noted in this Politico article:

Trump’s advisers, who had expected Congress to have passed a repeal bill by now, have not agreed what to do about the subsidies, which help low-income people covered by Obamacare pay for their out-of-pocket health costs. One senior official said that the Department of Health and Human Services and the White House Office of Management and Budget were studying the impact of abruptly stopping billions of payments to the health plans that participate in the Obamacare markets. Insurers would have to pick up these costs, regardless of whether the federal funds are released.

White House adviser Steve Bannon and his allies have argued to stop the subsidies, although even the hard-core Obamacare foes worry about the fallout from a precipitous collapse, according to sources inside and outside of the administration.

OK, so it's really, really important that the CSR payments are guaranteed in order to prevent the carriers from either a) jacking up rates by an extra 20% or more next year, which would be bad...or b) dropping out of the individual market altogether next year (as Humana and Wellmark have already announced, and as Anthem is starting to threaten), which would be far worse, right?

Well, ok...except there's a third possibility which is even worse than either of these (note that I originally posted the below text before the November election):

As noted later in my September post, this analysis was provided to me by a trusted source, and Prof. Bagley said that a cursory read of it suggests that yes, it does seem to be accurate:

The typical agreement a QHP issuer enters into if selling on the FFM requires them to keep the policy in force for the entire calendar year. [This exit clause] gives them option to term the policy abruptly if the Courts rule, or a Trump administration decides, that it won't pay CSR offset payments to carriers. Because this won't hit the Supreme Court until late 17 or early 18, I think this is as much about assuaging carriers fears of a Trump admin trying to destroy the marketplaces as anything else.

In other words, a Trump administration could come in the office on January 20 immediately directing the treasury secretary to not make the February 1 payment for CSR (and only pay the APTC) that month.

This would be devastating in two different ways.

First, it would immediately cut off Cost Sharing Reduction payments for perhaps 6-7 million people starting in February. This is the financial assistance to people below the 250% Federal Poverty Level who are enrolled in Silver exchange policies which covers a large portion of their deductibles and co-pays.

Even more nightmarish, however, is that under this scenario, the "exit clause" appears to give the carriers the contractual right to terminate existing policies immediately. As in, not 12/31/17, but January 31st, 2017...just 11 days after Trump is inaugurated (and, as it happens, the last day of the 2017 open enrollment period).

As noted, this could be Trumped (hah!) by state laws disallowing such terminations, and depending on the wording of the contracts, they might only be allowed to kill off Silver plans; I'm not sure how that works. But either way, this would make a situation which is already a disaster into a true catastrophe for millions of people.

The January/February date references are due to some of the above being written in September; the rest was written on November 9th. So far, the Trump administration has authorized CSR payments for February, March and April...but if the Politico story is accurate, it's still quite possible that Trump will pull the plug on them starting as early as May 1st (or June, or July...)

If that happened, not only would it guarantee that the carriers would either jack their rates up dramatically or leave the indy markets altogether next year (or a mix of both)...but they could, depending on state laws, potentially cut off current enrollees as soon as the end of that month.

Yes, that's right: There's an outside possibility that several million people could have their policies terminated as early as May 30th, 2017.

Again, if it was any other President--even another Republican one--I wouldn't think this to be remotely possible...but we're talking about a petulant child in the White House here.