The Health 202: Half of Americans think Obamacare marketplaces are crumbling

FILE - In this June 1, 2017, file photo, a sign stands on the campus of the Aetna headquarters, in Hartford, Conn. Insurers are dropping billions of dollars on acquisitions and expansions as they get more involved in their customers’ health. Late last year, CVS Health announced a roughly $69 billion deal to buy another insurer, Aetna. Those companies plan to convert drugstores into health care hotspots that people can turn to for a variety of needs in between doctor visits. (AP Photo/Bill Sikes, File)

Half of Americans think the Obamacare marketplaces are falling apart. But they're not - even though Republicans have pulled out some legs from under them.

Fifty-three percent of people believe the individual marketplaces - where those without workplace coverage can get subsidized health-care plans - are "collapsing," according to a Kaiser Family Foundation poll released Tuesday morning. And while 64 percent of Republicans believe this narrative, nearly half of all Democrats buy into it, too.

Such public sentiment is perhaps not surprising, given the marketplaces' turbulent year under the GOP's congressional and executive branch rule. Democrats are responsible for the structure of the marketplaces - and new health benefit mandates that pushed premiums higher. But Republicans have not solved the existing problems and perhaps even made them worse.

Recall late last month, when it became clear lawmakers weren't going to fund extra payments to help insurers lower premiums in the omnibus spending bill - or perhaps ever. Before that, President Donald Trump took steps to exempt more plans from Affordable Care Act requirements by expanding short-term and association health plans, which could lower premiums for healthy folks but make them more expensive for the sick.

Congressional Republicans did try and dramatically fail to replace the much-maligned ACA with a system offering cheaper health insurance. And they've been bragging since December about how they repealed its penalty for lacking coverage, which could further inflate premiums if enough healthy people drop coverage as a result.

Add all these actions together and it certainly means the marketplaces aren't headed for the kind of dramatic revitalization they needed, where the 10 million people covered under them suddenly find a wide selection of affordable plans instead of double-digit rate hikes and insurer exits.

Over the next few months, insurers will be filing their 2019 rates with the Centers for Medicare and Medicaid Services. Stakeholders are closely watching the trajectory for premiums and level of competition in the marketplaces. There remains the possibility that some counties may lack insurers, a problem the administration narrowly circumvented last year.

But Republicans' actions, while perhaps maladroit, aren't exactly a death knell to the marketplaces, either. The insurers have had five years to adjust premiums to make them sustainable, and those unable to survive have mostly exited. Enrollment for 2018 came in higher than most people expected, and a strong demand remains for health coverage among people who don't get it from their employer.

"I do think [enrollment] is headed down rather than up if there's not a solution. But it won't happen overnight," Joel Ario, who headed up the marketplaces during the Obama administration, told me.

Ario said the repeal of the law's individual mandate will negatively affect the marketplaces because it could cause younger, healthier people to drop out of them, pushing up premiums for everyone left. But the Kaiser poll offers evidence that at least among current enrollees, most intend to continue their coverage even without a requirement by the federal government to do so.

Nine in 10 respondents to the Kaiser survey said they will continue buying their own insurance even when the penalty for being uninsured is no longer in effect. Respondents indicated they're more driven to buy coverage to avoid hefty medical bills and for peace of mind, rather than simply because it's required by the government.

Seventy-five percent said a major reason for being covered was to "protect against high medical bills in the case of severe illness or accident" and 66 percent cited "peace of mind" as another major reason. Just 34 percent said the mandate was a major reason they'd decided to buy a plan.

And there's evidence that marketplace insurers are beginning to regain profitability, if you look at how much insurers pay out in benefits versus how much they collect in premiums. Medical loss ratios began to decline in 2016 and showed even more improvement last year, according to a January report by KFF researchers Cynthia Cox, Ashley Semanskee and Larry Levitt.

As time ticks down to the next enrollment period, which will again run from Nov. 1 to Dec. 15, the question is whether increased stabilization among insurers is enough to counter the negative effects of repealing the individual mandate. When all is said and done, the two effects might end up roughly canceling each other out.

"The carriers have now gotten their rates to a point where their balance sheets are pretty good," Ario told me. "What would have been fairly stable rates will be up some, but not hugely."

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