Health

Max Nisen is a Bloomberg Gadfly columnist covering biotech, pharma and health care. He previously wrote about management and corporate strategy for Quartz and Business Insider.

Being stubborn has consequences.

A last-ditch effort by Senate Republicans to repeal Obamacare has little chance of succeeding by a September 30 deadline. But that doesn't mean it won't cause damage. 

Pacino Formation
Just when insurers thought they might be free of ACA repeal efforts, the GOP pulled them back in
Source: Bloomberg

This last-gasp bill -- called Graham-Cassidy after the senators leading it -- would be extremely disruptive to hospitals and government-focused insurers. The proposal ends individual and employer insurance mandates, gives states a big chunk of money and then largely leaves them to run their own health-care markets. It would likely lead to large cuts to Medicaid, destabilize the individual insurance market, and significantly reduce insurance coverage.

The Senate's ability to pass this legislation expires in 12 days. That's a rather short time to overcome a daunting array of policy and procedural issues and convince 50 Senators to vote yes. Past repeal efforts managed to fall apart with fewer challenges and a far more generous timeline.

But even if it fails, this effort adds to more than seven months of health-care uncertainty. That, and a lack of consistent government support, has helped prompt insurers to either leave Affordable Care Act markets in some states or to substantially hike premiums.

The deadline for insurers to set their 2018 rates is September 27. Instead of focusing on a bipartisan effort to stabilize the individual insurance market and convince more insurers to participate in the ACA or to lower rates, we're getting another doomed effort to destroy the market. This, and what it signals about the GOP's unwillingness to give up on this issue, will reduce the already slim chances of passing legislation that helps the sector.  

Last week, the Congressional Budget Office substantially reduced its estimates for the number of people that will obtain insurance under Obamacare. That reflects sluggish enrollment trends, along with the individual mandate and other insurance-buying incentives not working as well as the CBO expected.

But the CBO also blames the Trump administration's cuts to funding for enrollment promotion, along with a rise in premiums spurred by uncertainty about ongoing government support for subsidies for some low-income enrollees. Funding those subsidies is the centerpiece of stalled stabilization efforts in Congress. 

A more-fragile insurance market harms insurers that participate in the ACA. It leaves people with fewer choices and higher premiums. And it means hospitals face lower demand, because people lack insurance, or higher costs due to uncompensated care. Insurers such as Molina Healthcare Inc. and hospital chains such as HCA Healthcare Inc. are already struggling in the current environment and can't afford for things to get worse. 

Cut
The CBO has substantially cut Obamacare coverage estimates in part due to uncertainty sparked by administration actions and repeal efforts
Source: Congressional Budget Office

You don't have to blow up the market to cause casualties. 

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Max Nisen in New York at mnisen@bloomberg.net

To contact the editor responsible for this story:
Mark Gongloff at mgongloff1@bloomberg.net