TIMELINE: "I might even be able to crash the whole damned system."


(This is an updated version of a post from February 1st):

COSMO: When I was in prison I learned that everything in this world, including money, operates not on reality...

MARTY: ...but on the perception of reality.

COSMO: Posit: People think a bank might be financially shaky.

MARTY: Consequence: People start to withdraw their money.

COSMO: Result: Pretty soon it is financially shaky.

MARTY: Conclusion: You can make banks fail.

COSMO: Bzzzzt! I've already done that. Maybe you've heard about a few? Think bigger.

MARTY: Stock market?


MARTY: Currency market?


MARTY: Commodities market?


MARTY: Small countries?

COSMO: I might even be able to crash the whole damned system.

Friday, January 20th:

Politically, the big unknown is whether or not Paul Ryan and Mitch McConnell will get away with trying to pin the blame for this on the Democrats/the law itself. That's why they've been pushing the "Obamacare is already in a death spiral!" claim hard for the past few weeks, even though it quite simply isn't.

...So, if this does end up in a worst-case scenario, Trump's "stop enforcing the mandate altogether!" order here could end up causing that death spiral even if the GOP doesn't technically end up repealing anything legislatively. The carriers would start announcing that they're bailing next year as soon as this spring (remember, the first paperwork for 2018 exchange participation has to be filed in April or May), and McConnell/Ryan would simply say, "See?? We told you it was collapsing all by itself! We didn't touch nuthin'!!"

Tuesday, January 24th:

The agencies also estimate net federal subsidies for coverage obtained through the marketplaces to be $49 billion, or 0.3 percent of GDP, in fiscal year 2017. Those subsidy amounts are projected to rise at an average annual rate of about 9 percent, reaching $110 billion (or 0.4 percent of GDP) in 2027. For the 2018– 2027 period, the net subsidy is projected to total $919 billion under current law.

...Finally, the CBO is now stating, flat out, that prior to Trump taking office, the GOP starting the ACA repeal process, Trump's "sabotage" executive order and so forth, they were projecting average subsidies for ACA exchange enrollees to increase at a rate of roughly 9% per year for the next decade.

...Again, this is all speculative, but the bottom line is that the CBO is stating pretty clearly that with the ACA, while they don't see the individual market being in the greatest shape, neither do they see a death spiral under the current law.

October 6, 2016, via Anna Wilde Mathews:

Molina Outperforms Rivals in ACA Marketplaces

...Molina’s approach—rigorous cost control, limited networks of doctors and hospitals and close management of patients’ health—signals what can work in the health-coverage marketplaces created by the Affordable Care Act. Long Beach, Calif.-based Molina has done relatively well in the exchanges, where larger rivals have faltered. While UnitedHealth Group Inc., Aetna Inc. and Humana Inc., have lost millions on ACA plans and are pulling back from the marketplaces, Molina is profitable, though the margins are slim. The company projects that its margins on the exchange business this year will be within its targeted range, between 1.5% and 2%.

...Analysts worry that Molina, which has around 600,000 marketplace enrollees across nine states, next year may pick up high-cost enrollees formerly covered by insurers that withdrew from exchanges. Molina “is really going to be tested as the bigger players leave the market and the risk moves to them,” said James Sung, an associate director with S&P Global Ratings.

Ms. Rubino said company officials “anticipate another solid year” for the exchange business in 2017, and that Molina adjusted prices to account for the impact of others’ exits.

So, that was how Molina, one of the largest ACA exchange participants (around 7% of all exchange enrollees) felt about the future of the ACA just a month before the election.

And now?

Tuesday, January 24th, via Bob Herman of Axios:

In an interview, Molina said the executive order is "symbolic" and doesn't change the plans for his company, an insurer that mostly covers Medicaid members but also has more than a half million Obamacare customers. Yet when asked if Molina Healthcare would keep offering Obamacare plans in 2018, he said: "There are just too many unknowns at this point to give a definitive answer."

Why this matters: Insurance companies need to submit their 2018 Obamacare plans and rates in the next few months. Molina is a significant and profitable player in the marketplaces, and its hesitancy indicates insurers will wait as long as they can before they decide to stay in or leave. That's not exactly a recipe for a stable market.

On Obamacare: Trump cannot unilaterally eliminate Obamacare's insurance mandate and coverage penalties. They are embedded within the law and require an act of Congress. Instead, Molina is more concerned what Congress will offer up as a full-scale replacement.

Wednesday, January 25th, via Paul Demko of Politico:

The Trump administration has pulled the plug on all Obamacare outreach and advertising in the crucial final days of the 2017 enrollment season, according to sources at Health and Human Services and on Capitol Hill.

Even ads that had already been placed and paid for have been pulled, the sources told POLITICO.

...The last five days of the open enrollment season are seen as critical because many individuals procrastinate and then join a last-minute sign-up surge. That’s particularly true for younger and healthier customers who are crucial to making insurance markets work.

...The decision to scrap Obamacare outreach and advertising came directly from the White House, according to sources.

Now, they did backtrack somewhat on this the following day, either due to the massive backlash, sheer inability to pull the ads that late or a combination of both, but they still killed off a substantial amount of last-minute advertising:

Spending on television spots by HealthCare.gov plummeted in the final days of open enrollment, according to data from iSpot.tv, an ad tracking firm. Advertising peaked at roughly $1 million per day from Jan. 24 to 26. Then, it fell roughly 80 percent — to less than $250,000 per day — over the next four days, according to the most recent data.

“That basically tells me that the strategy or the plan to eliminate as much advertising as possible was executed,” said Kevin Counihan, the CEO of HealthCare.gov in the Obama administration. “The is the second most active period of time to enroll, and a disproportionate share of younger people come in at this time.”

Friday, January 29th, via Tami Luhby of CNN Money:

Insurers warn: We're outta here with no Obamacare replacement

Health insurers want to see how Congress intends to replace Obamacare before they commit to offering policies for 2018, a new survey has found.

One of the biggest issues is the individual mandate, which requires nearly all Americans to buy insurance or pay a penalty. If Republican lawmakers repeal the mandate without a replacement plan, insurers said they'd "seriously consider" withdrawing from the market next year, the Urban Institute report said. They see "significant" risks in remaining while the details of a replacement bill are in doubt.

...Surveys show that as many as 40% of enrollees say they wouldn't have signed up without the mandate, the Urban report found.

"Pulling one leg out of the stool, we crash to the ground," said one respondent.

Wednesday, February 1st, via Zachery Tracer of Bloomberg News:

Obamacare’s Slow and Painful Death Puts Health Insurers in Limbo

Obamacare looks like it’s going away. Until that happens, big health insurers aren’t sure what to do with it.

Republicans and President Donald Trump haven’t given details on how they’ll repeal and replace the Affordable Care Act. Uncertainty about the law, which covers millions of Americans, has left companies trying to figure out if they’re better off stuck in limbo or just quitting entirely.

Aetna Inc. Chief Executive Officer Mark Bertolini warned Tuesday that the company won’t sell Obamacare plans again in states where it has pulled out, and may continue shrinking its participation, “given the unclear nature of where regulation’s headed.” On Wednesday, Anthem Inc. said its ACA business is stabilizing, but it’s carefully watching Washington while developing 2018 plans.

“We will make the right decisions to protect the business,” CEO Joseph Swedish told Wall Street analysts in a conference call. “If we can’t see stability going into 2018, with respect to either pricing, product, or the overall rules of engagement, then we will begin making some very conscious decisions with respect to extracting ourselves.”

Congressional Republicans face a dilemma, too. They want to paint Obamacare as collapsing to help justify its repeal. Yet they need to keep its markets humming this year, and probably into 2018, or take the blame for millions of people who might lose coverage. That will be the topic of hearings Wednesday in the Senate and Thursday in the House.

“Markets need clarity,” Tennessee’s insurance regulator, Julie Mix McPeak, will tell the Senate’s health committee, according to prepared remarks provided before the hearing. If insurers don’t get answers, some will quit the market, and Tennesseans could be left with nowhere to buy coverage, she says in her remarks.

...“They create a lack of confidence and then they point and say, ‘See, the ACA is failing,’” Hoyer said. “The chaos and uncertainty that this administration has created over the last 10 days has led to the very thing that they say is the problem.”

Gee, that sounds familiar.

Or, to put it even more succinctly, here's Anthem CEO Joseph Swedish regarding the 2017 Open Enrollment Period:

$ANTM CEO Swedish: encouraged by early #Obamacare open enrollment numbers; no outlook on make-up of risk pool; expect to break even on plans

— Bertha Coombs (@berthacoombs) February 1, 2017

...and here he is regarding the 2018 Open Enrollment Period (assuming there is one at all):

So, $AET says April 1 key date for #repealobamacare #repealanddelay rules; $ANTM says will decide on pulling the plug on 2018 at end of Q2

— Bertha Coombs (@berthacoombs) February 1, 2017

Yup. It's true that some carriers might have been considering dropping out of the exchanges in 2018 regardless...but between Trump winning, the GOP going full-speed ahead with repeal plans, Trump's executive order, the GOP not having the slightest clue what, if anything, they would replace the ACA with (or when that might take place), and the initial filing deadlines bearing down on the carriers like a freight train, some of the major players are already seriously talking about bailing BECAUSE OF THE TRUMP/GOP-INDUCED UNCERTAINTY.

I cannot stress this enough: IF the individual market collapses next year, it will be primarily due specifically to deliberate sabotage and uncertainty created by the GOP.

March 1st, 2017:

After their attempted merger with Aetna was roundly shot down by the federal government, insurance giant Humana issued a press release today with some major news:

Regarding the company’s individual commercial medical coverage (Individual Commercial), substantially all of which is offered on-exchange through the federal Marketplaces, Humana has worked over the past several years to address market and programmatic challenges in order to keep coverage options available wherever it could offer a viable product. This has included pursuing business changes, such as modifying networks, restructuring product offerings, reducing the company’s geographic footprint and increasing premiums.

All of these actions were taken with the expectation that the company’s Individual Commercial business would stabilize to the point where the company could continue to participate in the program. However, based on its initial analysis of data associated with the company’s healthcare exchange membership following the 2017 open enrollment period, Humana is seeing further signs of an unbalanced risk pool. Therefore, the company has decided that it cannot continue to offer this coverage for 2018. Through the remainder of 2017, Humana remains committed to serving its current members across 11 states where it offers Individual Commercial products. And, as it has done in the past, Humana will work closely with its state partners as it navigates this process.

March 24, 2017:

...Trump said he would not put the bill on the floor in the coming weeks. Instead, he is willing to wait and watch the current law continue and, in his view, encounter problems. And he believes Democrats will eventually want to work with him on some kind of legislative fix to Obamacare, although he did not say when that would be.

“As you know, I’ve been saying for years that the best thing is to let Obamacare explode and then go make a deal with the Democrats and have one unified deal. And they will come to us, we won’t have to come to them,” he said. “After Obamacare explodes.”

“The beauty,” Trump continued, “is that they own Obamacare. So when it explodes they come to us and we make one beautiful deal for the people.”

My question for the president: Are you really willing to wait to re-engage on health care until the Democrats come and ask for your help?

...“Hey, we could have done this,” he said. “But we couldn’t get one Democrat vote, not one. So that means they own Obamacare and when that explodes, they will come to us wanting to save whatever is left and we’ll make a real deal.”

...“You’re right,” he said. “I’m a team player but I’ve also said the best thing politically is to let Obamacare explode.”

...As he waits for Democrats, I asked, what’s next on health care, if anything, policy-wise?

“Time will tell. Obamacare is in for some rough days. You understand that. It’s in for some rough, rough days,” Trump said.

He added, “I’ll fix it as it explodes.

..So, you have a combination of all of the above, tremendous uncertainty and a ticking clock, and an administration which has already openly stated that they intend on sabotaging the law as much as possible.

If you're an insurance carrier CEO or board member, then assuming the individual market isn't a major part of your business...how likely are you to stick around next year regardless of whether the AHCA passes or not?

TODAY: Obamacare Stalwart Anthem Seen Likely to Retreat for 2018

Anthem Inc. is likely to pull back from Obamacare’s individual insurance markets in a big way for next year, according to a report from analysts who said they met with the company, a move that could limit coverage options for consumers at a politically crucial time for the law.

...An exit by Anthem might be devastating to insurance markets created by the Affordable Care Act, which is often called Obamacare. The company, which sells coverage under the Blue Cross and Blue Shield brand in 14 states, is one of the few big insurers that has stuck with the ACA. UnitedHealth Group Inc. and Aetna Inc. have already exited most states, and Humana Inc. is planning to stop offering individual ACA plans entirely for 2018.

If Anthem quits, consumers in parts of Colorado, Kentucky, Missouri and Ohio would be at risk of having no Obamacare insurers for next year, according to an analysis from Axios, a news website. Humana’s exit, similarly, will leave parts of Tennessee with no ACA insurance options, though state officials have said they’re working to attract other insurers.

Anthem is talking with the administration “to emphasize the importance of regulatory and statutory changes in order to ensure sustainability and affordability of the individual market for consumers,” it said in an emailed statement. The company continues to “actively pursue policy changes that will help with market stabilization and achieve the common goal of making quality health care more affordable and accessible for all.”

The insurer lost $374 million on its individual health plans last year, and is targeting a modest profit for 2017, according to Bloomberg Intelligence. Anthem has the biggest financial risk tied to Obamacare among major insurers, with an estimated 8.6 percent of 2017 revenue coming from the individual market, according to Bloomberg Intelligence.

...“If we can’t see stability going into 2018 with respect to either pricing, product, or the overall rules of engagement, then we will begin making some very conscious decisions with respect to extracting ourselves,” Swedish said on a call with Wall Street analysts to discuss fourth-quarter results. Ratings regions are geographic areas where insurers sell health plans.

Yes, that's right: Anthem is expecting to make a profit on the exchanges this year...but is still very likely to bail NEXT year SPECIFICALLY because of the "market instability" they see happening under full Trump/GOP control of the federal government.