Failure of Republican Bill Could Push More Health Plans Out of Obamacare

The Affordable Care Act remains the law of the land for the foreseeable future, but health plans will continue to pull out of the insurance marketplaces and feed uncertainty, one analyst says.

Healthcare insurers have been busy strategizing for the many possible outcomes of healthcare reform or the repeal of the Patient Protection and Affordable Care Act, but now have to switch focus to surviving under the current healthcare law.

For many, that will mean following in the steps of others who abandoned the ACA because they could not be profitable under ACA restrictions and requirements, one analyst says.

House Speaker Paul Ryan pulled the GOP's bill reforming Obamacare just before a planned vote, after criticism from many within the party, including the influential House Freedom Caucus.

Some companies might have been hoping that ACA reforms would make it possible for them to continue in the individual market, but since that didn't happen, many health plan leaders are probably considering their options for getting out, says Julius W. Hobson Jr., an attorney and healthcare analyst with the Polsinelli law firm in Washington, DC.

Insurers' 2018 Status Unknown, for Now
"I expect to see more insurers pulling out of the individual market because this adds to the uncertainty," Hobson says.

"Insurers, like [companies in any other industry], like as much certainty about the future as they can get, and right now you don't have any for healthcare organizations. The Republican plan might have been good or bad for them, but they would know what's coming and prepare for it. Now it's just uncertain, and that's always bad."

Health plans are locked in for 2017 and don't have to make their 2018 status known until late in the year, so Hobson says they are unlikely to make public comments right away.

Hobson also says that another attempt at reforming or repealing the law is unlikely to materialize soon. The Republican attempt to push a bill through on their own will not be tried again, he says.

President Trump remains intent on pursuing legislation. On Saturday he tweeted:

"The only way we'll see any change in healthcare is if Democrats are involved," Hobson says. "The idea of letting it implode on its own isn't going to work because the responsibility for that would be on the Trump administration. He's not going to be able to sell that."

Any effort to reform the ACA will require cooperation from legislators on both sides of the aisle, and Democrats are less inclined than ever to help Republicans gut their signature piece of legislation under former President Barack Obama, Hobson says.

"The failure is now on the Republican side of the ledger, so Democrats don't have any incentive to come to the table. If they ever had any willingness at all to negotiate, and I doubt they did, now they don't want to help the president recover from this," Hobson says.

"The failure of this first effort means we won't see any changes to the healthcare law any time soon."