“It’s a little like a patient with diabetes,” Dr. Mario Molina, chief executive of Molina Health Care, a major insurer on the ACA exchanges, told NBC News. “It’s relatively healthy at the moment, but if we don’t take care of ourselves, we could be in trouble in the future.”
President Donald Trump and other top Republicans argued that they needed to repeal the law and replace it because Obamacare is in a state of collapse. Trump said last week that Obamacare “will explode.”
“It is dying on its own,” White House Press Secretary Sean Spicer said on Monday. “It will be dead soon.”
Whatever disaster the White House is predicting hasn’t happened yet, though.
The law has had mixed results compared to its expectations, which foresaw more people receiving coverage, and it is coming off a shaky year in some states, but it’s still providing insurance to millions of people who could not otherwise afford it in the individual market. Without significant changes, it’s likely to continue doing so.
Molina’s company is considering whether to participate in various markets next year and where to set premiums, but the top concerns he described heading into that decision primarily involved “uncertainty” about the Trump White House‘s intentions, not the law itself. In particular, he’s worried that the administration might halt subsidies to help low-income Americans with out-of-pocket costs that Republicans have challenged in court and that they might stop enforcing the individual mandate requiring people to purchase insurance.
“I don’t think the marketplace is collapsing,” he said. “I think we need to stop playing partisan politics and convene bipartisan groups to start negotiating the future of the health care system.”
The nonpartisan Congressional Budget Office concluded this month that the exchanges were stabilizing and would likely remain solid in the future. S&P Global Ratings has also indicated that it believes insurance markets will become more stable as insurers figure out how to properly price plans in the still-new exchanges.
Obamacare’s biggest issues
The two biggest challenges for Obamacare lately have been a recent spike in premiums — 25 percent last year — due to a lack of healthy customers and threats from insurers to exit the markets because they’re not making a profit, including some big names that have already left.
These are both serious concerns, but they’ve yet to become a full-blown crisis, mostly because of stabilizing elements of the law designed to shield beneficiaries from rising prices on insurance.
The premium increases, for example, were not enough to significantly derail enrollment, mostly because the law’s subsidies to buy insurance increased to make up the difference.
Of the people who enrolled through the national HealthCare.gov site, 84 percent qualified for government aid. For those customers, the average monthly premium after factoring in subsidies was $106, according to the Centers for Medicare and Medicaid Services, the same as what it was the year before.
Thanks to combined subsidies, 12.2 million Americans signed up for plans on the insurance marketplace created by the ACA during the enrollment period for 2017, according to CMS. This was a drop from last year’s total of 12.7 million, however, which some observers blamed on a move by the Trump administration to pull TV ads promoting the exchanges in the final days of open enrollment, when there’s typically a rush of late customers.
Either way, it’s a far cry from the “death spiral” that House Speaker Paul Ryan, R-Wisconsin, claimed, referring to a specific type of market in which sick patients dramatically outnumber healthy ones, causing a spike in premiums and a major reduction in signups. The total uninsured rate as of January is 10.9 percent, according to Gallup, a dramatic drop from the 17.1 percent it stood at in 2013 before the law’s main features first took effect.
Asked to give Obamacare a physical evaluation, several experts who talked to NBC News likened those issues to a manageable health problem that would require deliberate malpractice to become a more serious threat.
“ACA suffers from chronic, preexisting conditions that are debilitating, but not fatal, as long as federal taxpayer life support is available,” Thomas Miller, a fellow at the American Enterprise Institute and a critic of the law, said in an interview.
That doesn’t mean everything is rosy. When it comes to consumers, the biggest challenges concern two groups: higher-income customers who make too much to qualify for subsidies, and thus are vulnerable to significant premium increases, and lower-income customers who are left behind by a loophole the Supreme Court created regarding the law’s Medicaid expansion, which currently covers more than 12 million people.
Originally, the law was designed to expand Medicaid to all adults making up to 138 percent of the federal poverty line, but the courts ruled it was optional, and 19 states have not accepted the increased funding. Because the law did not anticipate this change, the Kaiser Family Foundation estimates there are more than 2.5 million people who make too much to qualify for Medicaid but too little to qualify for subsidies on the exchange.
In rural communities where medical costs tend to be higher and the pool of customers is smaller, states have also had difficulty attracting insurers. As a result, 21 percent of exchange customers live in places with only one insurance provider in 2017, according to an analysis by the Kaiser Family Foundation. That’s a big increase from 2016, when the figure was just 2 percent. In Tennessee, where several companies have withdrawn, an area that includes the city of Knoxville is worried that it could potentially not have insurers next year.
“In many states, it’s going in the wrong direction with health plans pulling out,” Billy Wynne, a health policy consultant at Thorn Run Partners, told NBC News. “The whole idea of the ACA is that these exchanges would succeed in bringing down premiums via competition, but you need participation to have that competition.”
That having been said, Wynne predicted that the law’s subsidies would induce insurers to enter markets where others pulled out, because the subsidies would rise to meet high premiums. Those types of monopolies could create more problems for the federal budget (although the ACA is spending less than originally projected so far), but as long as the law operates as planned, the hit to the average customer would be more muted.
“I don’t think it’s going to collapse absent intervention,” Wynne said. “I think it could and likely would collapse with neglect or willful sabotage.”