Health Insurers Say They Don't Want To Go Back To Being The Bad Guys

Feb 3, 2017
Originally published on February 3, 2017 6:34 pm

President Donald Trump and other Republican leaders have been working to repeal and replace the Affordable Care Act. And the millions of Americans who have health insurance through the Obamacare marketplaces aren't the only ones wondering about their fate. Leaders of insurance companies are, too.

Sabrina Corlette, a research professor the Center on Health Insurance Reforms at Georgetown University and colleagues interviewed executives at 13 different insurers to get their perspectives in this moment of uncertainty. Their report was published by the Robert Wood Johnson Foundation and The Urban Institute.

All Things Considered's Audie Cornish talked with Corlette Friday about the findings. The conversation has been edited for length and clarity.


Interview Highlights

On what worries insurers most about repeal and replace

The big issue across every insurance executive's mind is the uncertainty. Particularly concerning is the potential that two legs of the ACA's three-legged stool might get knocked out. You have number one, subsidies that help people afford insurance premiums; and, number two, a mandate that helps get healthy people to enroll in health care. Congress has threatened to repeal both of those things. And if that happens, insurers are going to need to leave the market, because they won't be able to make a go of it.

On how uncertainty affects insurance plans

First thing to know about insurers in the Obamacare marketplace is that they're not monolithic. We talk to large national carriers, for-profits, nonprofits, local community-based provider plans, all really coming at this from different perspectives. Some are very committed to staying in the market and serving populations, others not so sure. But across the board they all said we cannot tolerate uncertainty.

There comes a certain point where they can't price the product high enough to account for the uncertain environment they're in. And they have to make those decisions right now because they're putting together their [2018] products for review process starting in May. My guess is, when they come out in May we'll see some pretty big price hikes because the uncertainty they feel in the policy world from Congress and the White House will play out into the premiums that people will ultimately pay.

On what provisions of Obamacare need to remain

One thing we heard over and over was the need to maintain some form of incentive for healthy people to sign up for coverage. The Obamacare approach has had a penalty for people who don't enroll, which has been very controversial in Congress. But insurance companies will tell you they don't think it was a strong enough incentive. They feel like it needs to stay or replaced with something at least as strong to get people to sign up.

On if insurers will fight to keep healthy people in the system

Whether or not they'll fight for a specific mandate, I'm not sure. But they'll fight for the balance of healthy and sick. If [that's not there], if it's a market that just allows sick people to come in without healthy people, it's not a workable market. Another thing they could do is say, 'If you're getting rid of the original mandate you have to allow us to go back to the days when we can deny people insurance if they have a health issue.' Because you can't have it both ways.

On whether insurance companies want to revert to pre-ACA times

No, not at all. Before the Affordable Care Act, insurance companies were in many ways the bad guys. People didn't like them because they denied coverage to sick people and charged more. Now I think their public image has improved. Everyone gets covered, even with preexisting conditions. I don't think they want to go back to the days when they were the bad guys.

On the other hand, I don't think they feel that Obamacare was a perfect law. They found plenty to criticize. But my sense is that they'd rather see improvements to basic structure rather than starting back from scratch.

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AUDIE CORNISH, HOST:

President Trump and other Republican leaders are working furiously to repeal and replace the Affordable Care Act. Millions of Americans who have health insurance through the Obamacare marketplaces are wondering what will happen to them. Also scratching their collective heads - insurance companies. The Urban Institute and the Robert Wood Johnson Foundation recently interviewed executives at 13 insurers to get their perspectives at this moment of uncertainty.

Sabrina Corlette of Georgetown University was one of the researchers, and she joins us in studio. Hi there, Sabrina.

SABRINA CORLETTE: Hi, Audie.

CORNISH: You know, one thing you noted in your report was that in some ways the insurers were caught off guard by the election and election results, which surprised me because the problems (laughter) in the Affordable Care Act have been in the making for a while.

CORLETTE: I think many insurers were preparing for Hillary Clinton to win the election and expecting that if there were changes to the Affordable Care Act, they would be fairly modest. And so we were surprised as well in that the number of executives we spoke to that were sort of scrambling to figure out what their options were in this new policy environment.

CORNISH: All right. So in your research, you are making these phone calls to insurance executives, and you're asking them, OK, how worried are you about this repeal idea this year? What kinds of things do they say to you?

CORLETTE: Well, the first thing to know about insurers is they're not monolithic. They're coming from very different places. We talked to large national carriers. We talked to for-profits and nonprofits. We talked to local community-based provider-led plans. They really are coming at this from different perspectives. Some are very, very committed to staying in the market and serving this population. Others - not so sure about it.

But across the board, all of them said we cannot tolerate uncertainty. And so there comes a certain point when you just can't price your product high enough to account for the uncertain environment that they're in.

CORNISH: And they start making those decisions this year for next year.

CORLETTE: Exactly. They have to make these decisions right now because they're putting together their products and everything else for the review process, which starts in May. And my guess is when those plans and rates come out in May, we're going to see some pretty big price hikes because the uncertainty that they're feeling in the policy world from Congress and the White House is going to play out into the premiums that people will ultimately pay.

CORNISH: There's lots of ideas floating around about how a repeal or how a replacement should work. Did you hear insurance executives talking about specific provisions that they think need to go or stay that they were worried about?

CORLETTE: Well, one thing we heard over and over again was the need to maintain some form of incentive for healthy people to sign up for coverage. Of course, the Obamacare approach has been a penalty for people who don't enroll, which has been very controversial. Insurance companies will tell you they don't think it was a strong enough incentive. But they feel like that needs to stay, or it needs to be replaced with something at least as strong in terms of incentive to get healthy people to sign up.

CORNISH: Do you get the sense from insurers that they want things to be the way they were before the Affordable Care Act?

CORLETTE: No, not at all. I mean, if you remember before the Affordable Care Act, insurance companies were in many ways sort of, you know, the bad guy, right? People didn't like them because they were denying coverage to sick people, and they were charging them more and denying care.

Now I think their public image has improved because everybody gets covered even if you have a preexisting condition. So I don't think they want to go back to the days when they were sort of the - considered the bad guys.

CORNISH: Right. Now Obamacare itself is the bad guy - right? - ironically.

CORLETTE: (Laughter) Right. So I don't think they want to go back to that. On the other hand, I don't think they feel that Obamacare was a perfect law by any means. They've found plenty to criticize in it. So I - my sense is that they would rather see improvements to the basic structure of the law rather than starting back from scratch.

CORNISH: Sabrina Corlette is a professor at the center on health insurance reforms at Georgetown University. Thank you so much for speaking with us.

CORLETTE: Thank you, Audie. Transcript provided by NPR, Copyright NPR.