McConnell’s new tactic on Obamcare repeal could devastate health insurers | McClatchy Washington Bureau

Republicans faced another stunning defeat Tuesday as three senators rejected the latest effort to uproot Obamacare, even as Senate Majority Leader Mitch McConnell pledged to hold a vote.

The latest setback came just hours after the collapse of Republican legislation to replace the Affordable Care Act, forcing McConnell to switch gears and try to pass a straight repeal of the health law that would take effect in two years.

In a Twitter post late Monday night, President Donald Trump expressed his support for the new approach. “Republicans should just REPEAL failing ObamaCare now & work on a new Healthcare Plan that will start from a clean slate. Dems will join in!,” he said.

But the legislative climb will be difficult because the delayed-repeal proposal – with no replacement plan – would likely cause premiums to sharply increase and untold millions to lose their coverage. Those are the same problems that led moderate Republicans to help shutter the Better Care Reconciliation Act.

On Tuesday, three moderate Republican senators, Susan Collins of Maine, Shelley Moore Capito of West Virginia and Lisa Murkowski of Alaska announced they will not vote to move the new proposal to a full floor vote.

The political impasse highlights the difficulty Republicans face trying to pass health care legislation that would take coverage from millions of people in order to fund tax cuts that mainly benefit corporations and the wealthy.

In January 2016, President Barack Obama vetoed GOP legislation that would have, in two years, repealed the Medicaid expansion and eliminated tax credits that help people purchase coverage.

But the legislation would have immediately eliminated the individual mandate while continuing the Obamacare requirement that insurers offer coverage to those with pre-existing conditions. It also scrapped most of the taxes that fund the ACA’s coverage expansion.

That legislation was passed the Senate in 2015 under budget reconciliation rules that required only a simple majority. The Better Care Reconciliation Act, known as BCRA, was introduced under similar rules.

Larry Levitt, senior vice president at the Kaiser Family Foundation, said the delayed-repeal legislation would have devastated insurers. And a similar bill proposed by McConnell would likely be no different.

“That bill is the nightmare scenario for insurers,” Levitt said Tuesday in an e-mail. “They would still have to cover people with pre-existing conditions, but there would be no individual mandate or premiums subsidies to get healthy people insured to balance out the risk pool.”

The Congressional Budget Office estimated the House-passed version of the 2015 legislation would have caused 14 million people to lose coverage in 2018, with most of the losses due to “repealing the penalties associated with the individual mandate.” The coverage loses were estimated to reach 24 million in 2026. The CBO estimated the bill would cause premiums to jump 15 to 20 percent.

In a December 2016 letter to congressional leaders, Cori Uccello, senior health fellow at the American Academy of Actuaries, warned that new delayed-repeal legislation “likely won’t be enough to assure the stability and sustainability of the individual market.”

If a delayed repeal bill is passed and signed into law by Trump, insurers could decide to exit the market, fearing healthy people wouldn’t buy coverage without individual mandate penalties for not doing so. That would leave sicker, costlier people in coverage, which would lead to higher premiums and major losses for insurers.

“Even if the effective date of a repeal is delayed,” Uccello wrote, “the threat of a deterioration of the risk pool could lead additional insurers to reconsider their participation in the individual market.”

Insurers have to decide between now and the end of September whether to offer Obamacare coverage in 2018, Levitt’s e-mail said. They’ll be “reading every tea leaf for signs of what the administration will do about enforcement of the individual mandate,” he added.

Conservative groups wasted no time on Tuesday pushing Senate Republicans to move forward with the repeal-and-wait bill.

“They should vote in favor of the 2015-era Obamacare reconciliation bill,” said a statement from Dan Holler, CEO of Heritage Action for America. “They are on record supporting that bill. To be clear though, even if that partial repeal is adopted by Senate Republicans, it will mark just the first step in a long process toward unraveling the damage caused by Obamacare.”

But the plan is already facing strong criticism. On Tuesday, a group of eleven bipartisan governors, including Republicans John Kasich of Ohio, Larry Hogan of Maryland, Phil Scott of Vermont and Brian Sandoval of Nevada, called on Congress to scrap the proposal and include governors in their discussions on how to move forward.

“The Senate should immediately reject efforts to ‘repeal’ the current system and replace sometime later,” their letter said. The “best next step,” they claim, is for “both parties to come together and do what we can all agree on: fix our unstable insurance markets.”

New Orleans Mayor Mitch Landrieu, president of the U.S. Conference of Mayors, also criticized McConnell’s new plan, saying it could strain city finances by filling emergency rooms with large numbers of uninsured people.

“The mayors of America are asking Congress to stop, to refocus, to create a bipartisan coalition that includes mayors and governors and let’s, for the first time in a long time, come up with a bipartisan bill,” Landrieu said in a conference call with reporters.

The health insurer trade group, America’s Health Insurance Plans, wouldn’t comment on whether a delayed-repeal proposal would work. In a statement on Tuesday from AHIP spokeswoman Kristine Grow, the group expressed a willingness to keep working for a solution.

“We support solutions that deliver affordable choices while improving and protecting the health of all patients and the financial well-being of all consumers. We remain committed to working with every policymaker and the administration to ensure the short-term stability and long-term improvement of health care in our nation,” said Grow’s statement.

Lesley Clark contributed to this report.