Insurers face uncertainty in setting 2018 rates due to the possibility that the AHCA could pass, creating a smaller risk pool. This may lead insurers to submit higher initial rates to avoid further increases, put upward pressure on final approved rates, or cause some insurers to withdraw entirely from certain state markets. Congressional leaders could help stabilize markets by definitively ruling out ACA repeal legislation before insurers must finalize 2018 rates in late summer or early fall. Repealing the ACA without a replacement would significantly increase the uninsured population and cause premiums in the nongroup market to double by 2026 according to CBO estimates.

1. The Center on Budget and Policy Priorities (CBPP) - The Disruptive Effects
of Uncertainty
As long as the Administration and congressional leaders hold out the possibility of passing the
AHCA in some form, insurers making decisions about 2018 cannot know for sure which
individual market to price and prepare for: the larger, lower-cost market they would face under
current law, or the smaller market and sicker risk pool they would face under the AHCA.
Consequences of that uncertainty include:
 Insurers will submit higher proposed rates than they otherwise would. Rather than
risk having to come back and ask state regulators to approve higher revised rates, many insurers
are likely to submit proposed rates that are calibrated based on the 15 to 20 percent higher-cost
risk pool they would face if the AHCA were enacted.
 While these rates could be revised down later, the upward pressure on rates would only
be fully reversed if congressional leaders definitively ruled out ACA repeal legislation by the
time rates had to be finalized (generally late summer or early fall). Moreover, higher initial rate
submissions could directly affect final rates in some cases, particularly in markets with limited
competition. For example, a higher initial request could lead state regulators to view a smaller
subsequent increase as reasonable by comparison, even if the rates were still higher than would
be needed absent the AHCA.
 Some insurers may decide not to offer individual market plans at all in some
states. Even more damaging for consumers, legislative uncertainty may lead some insurers not to
submit plan and rate filings at all for some states or to significantly contract their participation,
maintaining only a token presence.[7]
To date, many insurers — even those losing money on their
individual market business — have continued to invest in this market because they expect that
investment to pay off as the market matures. But faced with the possibility that the individual
market could instead shrink by more than a fifth in 2018 — and by a third (in some states more)
by 2020 — some insurers may conclude that this market is no longer worth the financial risk it
entails. Others may decide that the uncertainty about the 2018 market environment makes
planning too difficult and elect to withdraw or contract their participation for now while they
wait for uncertainty to subside.
In general, an insurer’s decision not to file to offer coverage in a particular state cannot be
reversed. Thus, participation decisions made in the coming weeks will have lasting effects on
consumer choices for 2018.
Implications for Policymakers
Deadlines for insurers to make decisions about 2018 participation are approaching quickly.
Qualified Health Plan applications are due to the Centers for Medicare & Medicaid Services
(CMS) on June 21. But many states set their own plan or rate filing deadlines well before then;
for example, Connecticut, Nevada, Ohio, Oregon, Pennsylvania, and Virginia all have filing
deadlines in May.[8]
With insurers already well down the path of preparing for 2018, the uncertainty created by
congressional Republicans’ efforts to repeal the ACA has likely already done significant

2. damage. Moreover, insurers are also anxious about whether the Trump Administration plans to
administer the ACA marketplaces to promote stability or to try to make them “explode.”
Already, the Trump Administration has cut back on outreach activities, sent mixed signals about
enforcing the individual mandate, and issued an executive order widely interpreted as a directive
to federal agencies to start dismantling the ACA.[9]
Uncertainty about the Administration’s future
plans for cost-sharing reduction reimbursements, individual mandate enforcement, and CMS
outreach activities is adding to upward pressure on rates and could discourage insurers from
offering individual market policies for 2018.[10]
But while the responsibility for alleviating uncertainty about the operation of the ACA
marketplaces lies mostly with the Administration, congressional leaders could take one easy step
in coming weeks to help shore up the individual market in their states and around the country.
AHA & FAH Report on ACA repeal and related impacts on hospitals and
health systems
The American Hospital Association (AHA) and the Federation of American Hospitals (FAH) today
sent letters to President-elect Trump and Congressional leaders highlighting a new report that details
the impact a potential repeal of the Affordable Care Act (ACA) would have on hospitals and health
systems as they strive to care for their communities.
The report, which was commissioned by the AHA and FAH, was prepared by the health care
economics firm Dobson | DaVanzo. The report finds that, under the most recent repeal without
replacement bill, H.R. 3762,
 Hospitals would face a net negative impact of $165.8 billion from 2018-2026 after
accounting for the restoration of the Medicaid DSH cuts that H.R. 3762 contemplates.
 It also found that hospitals would suffer a loss of $289.5 billion in Medicare inflation updates
if the payment reductions in the ACA are not restored.
 Finally, the study authors calculate that the impact of retaining the Medicare and Medicaid
DSH reductions would amount to $102.9 billion.
“Losses of this magnitude cannot be sustained and will adversely impact patients’ access to care,
decimate hospitals’ and health systems’ ability to provide services, weaken local economies that
hospitals help sustain and grow, and result in massive job losses. As you know, hospitals are often
the largest employer in many communities, and more than half of a hospital’s budget is devoted to
supporting the salaries and benefits of caregivers who provide 24/7 coverage, which cannot be
replaced,” wrote Pollack and Kahn.
The letter also calls attention to a second Dobson | DaVanzo analysis that estimates the cumulative
federal payment reductions to hospital services that have been imposed through other Congressional
and Executive Branch actions subsequent to and independent of the ACA. These reductions alone
total another $148 billion from 2010 – 2026, and come on top of the ACA reductions.
Congressional Budget Office and the staff of the Joint Committee on Taxation (JCT) estimated the
budgetary effects of H.R. 3762, the Restoring Americans’ Healthcare Freedom Reconciliation Act of
2015, which would repeal portions of the Affordable Care Act (ACA) eliminating, in two steps, the law’s
mandate penalties and subsidies but leaving the ACA’s insurance market reforms in place.

3. In brief, CBO and JCT estimate that enacting that legislation would affect insurance coverage
and premiums primarily in these ways:
 The number of people who are uninsured would increase by 18 million in the first new
plan year following enactment of the bill. Later, after the elimination of the ACA’s expansion of
Medicaid eligibility and of subsidies for insurance purchased through the ACA marketplaces,
that number would increase to 27 million, and then to 32 million in 2026.
 Premiums in the nongroup market (for individual policies purchased through the
marketplaces or directly from insurers) would increase by 20 percent to 25 percent—relative to
projections under current law—in the first new plan year following enactment. The increase
would reach about 50 percent in the year following the elimination of the Medicaid expansion
and the marketplace subsidies, and premiums would about double by 2026.
Estimated Changes After the Elimination of the Medicaid Expansion
and Subsidies
The bill’s effects on insurance coverage and premiums would be greater once the repeal of the
Medicaid expansion and the subsidies for insurance purchased through the marketplaces took
effect, roughly two years after enactment.
Effects on Insurance Coverage. By CBO and JCT’s estimates, enacting H.R. 3762 would
increase the number of people without health insurance coverage by about 27 million in the year
following the elimination of the Medicaid expansion and marketplace subsidies and by
32 million in 2026, relative to the number of uninsured people expected under current law.
The estimated increase of 32 million people without coverage in 2026 is the net result of
roughly:
 23 million fewer with coverage in the nongroup market and
 19 million fewer with coverage under Medicaid, partially offset by an increase of about
11 million people covered by employment-based insurance.
By CBO and JCT’s estimates, 59 million people under age 65 would be uninsured in 2026
(compared with 28 million under current law), representing 21 percent of people under age 65.
By 2026, fewer than 2 million people would be enrolled in the nongroup market, CBO and
JCT estimate.
According to the agencies’ analysis, eliminating the mandate penalties and the subsidies while
retaining the market reforms would destabilize the nongroup market, and the effect would
worsen over time. The ACA’s changes to the rules governing the nongroup health insurance
market work in conjunction with the mandates and the subsidies to increase participation in the
market and encourage enrollment among people of different ages and health statuses. But
eliminating the penalty for not having health insurance would reduce enrollment and raise
premiums in the nongroup market.
Eliminating subsidies for insurance purchased through the marketplaces would have the same
effects because it would result in a large price increase for many people. Not only would
enrollment decline, but the people who would be most likely to remain enrolled would tend to be
less healthy (and therefore more willing to pay higher premiums). Thus, average health care
costs among the people retaining coverage would be higher, and insurers would have to raise

4. premiums in the nongroup market to cover those higher costs. CBO and JCT expect that
enrollment would continue to drop and premiums would continue to increase in each
subsequent year.
Effects on Participation by Insurers. In CBO and JCT’s estimation, the factors exerting
upward pressure on premiums and downward pressure on enrollment in the nongroup market
would lead to substantially reduced participation by insurers and enrollees in many areas. Prior
experience in states that implemented similar nongroup market reforms without a mandate
penalty or subsidies has demonstrated the potential for market destabilization. Several states that
enacted such market reforms later repealed or substantially modified those reforms in response to
increased premiums and insurers’ departure from the market.
After weighing the evidence from prior state-level reforms and input from experts and market
participants, CBO and JCT estimate that about half of the nation’s population lives in areas that
would have no insurer participating in the nongroup market in the first year after the repeal of the
marketplace subsidies took effect, and that share would continue to increase, extending to about
three-quarters of the population by 2026. That contraction of the market would most directly
affect people without access to employment-based coverage or public health insurance.
Effects on Premiums. In total, as a result of reduced enrollment, higher average health care
costs among remaining enrollees, and lower participation by insurers, CBO and JCT project that
premiums in the nongroup market would be about 50 percent higher in the first year after the
marketplace subsidies were eliminated—relative to projections under current law—and would
about double by 2026.
Repealing Obamacare affects everyone
Medicare
Dismantling Obamacare would likely mean higher premiums, deductibles and cost-sharing for
the 57 million senior citizens and disabled Americans enrolled in the program. It would also
bring back the infamous "donut hole" in Medicare's prescription drug coverage. The health
reform law made many changes to Medicare. It slowed the growth of payment rates to hospitals
and other providers, reduced payments to Medicare Advantage plans and improved benefits for
enrollees. Repealing Obamacare would increase Medicare spending by $802 billion over 10
years, according to estimates by the non-partisan Congressional Budget Office.
As a result, Medicare beneficiaries would pay more because premiums and deductibles are tied
to the growth of federal outlays. So seniors would face higher deductibles and co-payments for
their Part A, which covers hospital stays, and higher premiums and deductibles for Part B, which
pays for doctor visits and other services. The White House estimated that the typical Medicare
beneficiary is paying about $700 less in premium and cost sharing this year because of slower
growth in costs. Under Obamacare, Medicare enrollees receive free preventative benefits, such
as screenings for breast and colorectal cancer, heart disease and diabetes. This provision would
disappear under a full repeal.
Also, Obamacare called for closing the gap in Medicare's drug coverage in stages, completely
eliminating it by 2020. Senior citizens have to pay more for drugs while they are in the donut

5. hole. For 2016, the gap begins when enrollees and their insurers have spent $3,310 for
medication and ends after they hit $4,850 in costs. Since Obamacare was passed in 2010, more
than 11 million people have saved an average of more than $2,100 a person on prescription
drugs, according to the White House. Before the Affordable Care Act, beneficiaries had to pay
the full amount, or 100%, of their drug costs in the doughnut hole. That amount has shrunk each
year since the law took effect and today stands at 40% for brand-name drugs and 51% for
generics. The donut hole is slated to close to by 2020, when beneficiaries will be responsible for
25% of their brand-name and generic drugs after they meet their deductible, regardless of how
much out-of-pocket spending they incur throughout the year. The donut hole would return if
Obamacare were repealed.
Higher-income enrollees, however, would see some financial benefit from repeal. Obamacare
froze the threshold for the Medicare premium surcharge at $85,000 for individuals and $170,000
for couples, so more people have become subject to it. The law also added a premium surcharge
on drug coverage for wealthier beneficiaries.
Employer-sponsored insurance
Say goodbye to the employer mandate if Obamacare is repealed. Companies with at least 50
employees would no longer be required to provide affordable insurance to their staffers who
work more than 30 hours a week. This likely wouldn't have a major impact on the 150 million
workers who are insured through their jobs since larger employers already offer coverage for
full-time workers, Levitt said. However, setting the bar at 30 hours a week prompted some
employers to extend coverage to more of their staff, since many companies had considered that
threshold to be part-time. If repealed, companies could opt to cover only those working at least
35 or 40 hours a week, leaving some people uninsured.
Also, companies would no longer have to keep children on their parents' plans until they turn 26.
This has proved to be one of the more popular Obamacare provisions, with 2.3 million
Americans ages 19 to 25 signing up between 2010 and the start of open enrollment in 2013,
according to the White House's most recent figure. (Trump has said he may keep this policy.)
Workers, however, may have to start paying again for contraceptives and preventative
screenings, such as colonoscopies and mammograms. Obamacare requires these to be provided
free-of-charge. Obamacare also prohibits employers from imposing annual or lifetime limits on
benefits and caps out-of-pocket spending (to $7,150 for single workers in 2017).
Repealing Obamacare could have a bigger hit on employees who work at companies with fewer
than 50 workers.
They enjoyed many of the benefits Obamacare brought to the individual market. Insurers could
no longer ban workers with pre-existing conditions or ask them to pay more. It required plans to
cover an array of benefits, including maternity, mental health and prescription drugs. And it
limited insurers from charging older workers premiums more than three times those of younger
workers. All this could be reversed under repeal.
Individual market
Obamacare has had the largest impact on the individual market, which was largely unregulated
prior to the health reform law.

6. It sought to make health insurance more accessible and affordable in a number of ways. It
required insurers to cover people with pre-existing conditions and banned them from charging
the sick more. The law ended the practice of insurers imposing annual or lifetime caps on
benefits, and it also placed limits on annual out-of-pocket spending. It mandated that individual
insurance cover an array of benefits, including medication, maternity and mental health. It
prevented insurers from charging women more and restricted premiums for older folks at no
more than three times those of young adults.
Obamacare set up health insurance exchanges to allow Americans to shop for individual policies
and created federal subsidies so low- and moderate-income enrollees could buy policies for less
than 10% of their income. Another set of subsidies limit the deductibles and co-payments for
lower-income policyholders. Some 10.4 million people were covered through the Obamacare
exchanges, as of June.
Another 6.9 million Americans purchase individual policies outside of the Obamacare
exchanges. They cannot apply for subsidies, but receive all of the other benefits. (Trump has said
he would continue to require insurers to cover those with pre-existing conditions, but only if they
were continuously insured. Those who did not have coverage could be subject to higher
premiums or forced to apply for policies in state-based high-risk pools.)
Medicaid
Before Obamacare, most Medicaid enrollees were low-income children, pregnant women,
parents, the disabled and the elderly.
The health reform law opened up the program to low-income adults with incomes of up to 138%
of the poverty line -- $16,400 for a single person -- in states that opted to expand their Medicaid
programs. So far, 31 states, plus the District of Columbia, have done so, adding nearly 17 million
more people to the rolls since late 2013, just before the provision took effect. (This figure
includes both those newly eligible under expansion and those who always met the criteria.)
Related: Major changes for Medicaid coming under Trump and the GOP
Under the program, the federal government paid 100% of the costs of the expansion population
for the first three years and slowly lowered the reimbursement rate to 90%. Repealing
Obamacare would leave millions of the poorest Americans without insurance.
Uninsured
Under Obamacare, nearly all Americans have to obtain insurance or pay a penalty, which this
year hit $695 per adult or 2.5% of household income, whichever is greater. This mandate would
be lifted by repeal.
It Also Strengthened Medicare's Finances
Republicans eager to make structural changes to Medicare like to say the program is
“broke.” Rep. Paul Ryan used the phrase last November, and Rep. Tom Price repeated the refrain
last month in his confirmation hearing to become the head of the Department of Health and
Human Services. While Medicare's spending rate is rising due to increasing health care costs and
increasing numbers of beneficiaries, the program is not broke.
In fact, Medicare would be in worse shape if it weren’t for the Affordable Care Act. The law
included many cost-cutting provisions, including a reduction of federal payments to Medicare

7. Advantage plans, which are private insurance plans that you can buy instead of traditional Part A
hospital coverage and Part B doctor coverage. Because of that and other changes, the Part A trust
fund is projected to remain solvent for 11 years longer than before Obamacare was enacted,
according to an analysis by Paul N. Van De Water for the Center on Budget and Policy
Priorities.
Repealing the Affordable Care Act completely would add $802 billion to Medicare spending
from 2016 to 2025, according to the Congressional Budget Office. In order to fund this increase,
the program would likely raise premiums, deductibles, and cost sharing for beneficiaries,
according to the Kaiser Family Foundation.
Insurer spells out how much Trump-fueled uncertainty hikes premiums
Many insurers say that the uncertainty emanating from Washington D.C. is prompting them to
request even steeper hikes in premiums for 2018. Blue Cross and Blue Shield of North
Carolina is spelling out just how much it could cost consumers.
The insurer is requesting a rate hike of nearly 23% for next year. But it said it would have only
asked for an 8.8% bump if President Trump and House Republicans agreed to fund the
Obamacare cost-sharing subsidies through 2018.
The subsidies, which reduce deductibles and co-pays for lower-income Americans, are the
subject of a court battle left over from the Obama administration. The House filed suit against
the administration in 2014, arguing the payments to insurers were illegal because Congress never
appropriated the money. A district court judge last year agreed. However, she stayed her decision
and the Obama administration filed an appeal. The Trump administration has since inherited the
case. The administration and the House just asked for another three-month extension in the
matter, unnerving many insurers, which are in the midst of filing rates for the coming year.
"We're seeing the market begin to stabilize after three years of coverage," said Brian Tajlili,
director of actuarial and pricing services for Blue Cross of North Carolina. "Unfortunately, the
lack of CSR (cost-sharing reductions) funding significantly increases the rates for all ACA
(Affordable Care Act) customers."
The other factors contributing to the rate increase are growing medical costs, including physician
services and prescription drugs, and an Obamacare tax on insurers, the company said. The latter
represents roughly 3% of the total increase. While some other insurers are exiting Obamacare
amid the turmoil, Blue Cross of North Carolina said it intends to participate in all of the state's
counties. But the "undecided future" of the law could change that.
"Our filing does not guarantee our participation in offering plans," said Tajlili. Insurers have
started filing premium requests for 2018 with state regulators. Several carriers have asked for big
double-digit hikes, citing the lack of direction in Washington D.C. over Obamacare's future and
increasing health care costs and usage. While several carriers say their Obamacare businesses are
stabilizing, others are still racking up unexpectedly big bills from their policyholders. This is
prompting some to pull back or withdraw completely for 2018. Blue Cross and Blue Shield of
Kansas City announced Wednesday it is exiting Obamacare in 2018, possibly leaving nearly
19,000 Missouri residents without coverage option.

8. Aetna (AET), for instance, had been scaling back its participation, pulling out of 11 states for
this year and the remaining four for 2018. It said last month that it expects to lose more than
$200 million in its individual business line this year, on top of nearly $700 million in losses
between 2014 and 2016. Its CEO, Mark Bertolini, said in February that Obamacare is in a "death
spiral." (The insurer tentatively agreed to participate in the Nevada exchange next year to help it
win a contract to offer Medicaid policies in the state.)
Others say they just can't handle the lack of clarity.
In deciding to exit the Ohio market earlier this month, Anthem (ANTX) ticked off a list of
concerns, including "continual changes in federal operations, rules and guidance" and "an
increasing lack of overall predictability."
"A stable insurance market is dependent on products that create value for consumers through the
broad spreading of risk and a known set of conditions upon which rates can be developed," the
company said in a statement.
Even if they filed to be on an exchange, insurers won't be locked into participating next year
until September.
We'll stay, but you're going to pay
Some insurers say they'll offer Obamacare policies next year, but they have requested hefty rate
hikes. CareFirst BlueCross BlueShield is looking for an average rate increase of 52% for its
individual market plans in Maryland. Cigna wants to raise premiums by 32%, on average, in
North Carolina. And Blue Cross Blue Shield of Michigan is looking for an average 27%
increase.
Again, insurers cite different reasons for the rate hikes. Some say they are still losing money
because their policyholders are sicker than they expected, and premiums don't cover the cost of
their care. Others blame skyrocketing prescription drug prices.
But many also say they must factor in the uncertainty in Washington when setting prices. If the
individual mandate disappears, insurers fear they'll be left with even costlier customers who use
a lot of health services. And some are planning for the possibility that Trump will stop paying the
cost-sharing subsidies, which reduce the deductibles and co-pays of lower-income Americans.
The uncertainty surrounding the mandate and the subsidies is responsible for up to two-thirds of
the 2018 rate hikes, according to consulting firm Oliver Wyman. Overall, 43% of insurers the
firm surveyed plan to raise rates an average of 20% or more, while another 36% want to boost
premiums by 10% to 20%. About one-fifth of carriers are looking for increases of up to 10%.
Things are looking up
Obamacare is much more stable in other states. Multiple insurers have agreed to participate on
the exchanges and their rate requests are rather modest. In Pennsylvania, for instance, the five
insurers on the exchange are asking for an 8.8% increase, on average. "Absent anything bad
happening on the AHCA [American Health Care Act] front or the cost-sharing subsidies, they
feel like this market is really on the path to stability," said Insurance Commissioner Teresa
Miller.

9. Other insurers are also feeling better about Obamacare's future. Centene, for example, announced
last week it would expand into Kansas, Missouri and Nevada in 2018, bringing its total footprint
to nine states. "Last year marked another year of Centene's successful operations on the
exchanges," the company said in a press release, noting that it has 1.2 million Obamacare
enrollees at the end of March, more than double the number at the end of 2016.