LeClaire: Republicans quietly destabilized health insurance market

When U.S. Rep. Cathy McMorris Rodgers, or any Republican, chants the partisan mantra, “Obamacare is broken,” she should be thinking, “I know, we broke it.”

The most explicit and recent effort is Donald Trump’s threat to withhold $7 billion from the health insurance companies unless the Democrats negotiate on the spending bill. This is money pledged by the Affordable Care Act for cost-sharing reductions intended to make health care and health insurance affordable for working subscribers with lower incomes.

Insurance companies hate uncertainty. If an insurance carrier is faced with uncertainty about the health and numbers of customers who will buy insurance, its response is to either leave that geographic area or raise premiums. Why risk a business loss when it has business elsewhere? The president does not even need to actually withhold the money. The threat itself produces uncertainty.

This is what we see in rural areas such as northeastern Washington, where some of McMorris Rodgers’ constituents find themselves with only two insurance companies on the ACA exchange and rising premiums. (There are six insurance companies on the exchange in Spokane.) Many see this as the fault of the “broken” law and blame the law itself rather than the saboteurs.

Why does the Affordable Care Act depend on competition between insurance companies to help reduce the cost of insurance? Ironically, the predecessor of the Affordable Care Act, RomneyCare, was conceived in part by the conservative Heritage Foundation in the late 1980s as a market-oriented option to help control insurance costs.

RomneyCare was enacted in Massachusetts in 2006 and served as a model for the Affordable Care Act.

Even Donald Trump acknowledged health care is “an unbelievably complex subject.” Who knew? Well, the folks who wrote the ACA knew.

The basic premise of the Affordable Care Act is that premiums will be held down by companies competing for insurance buyers in a market with a standardized product and a broad pool of customers. To insure a large pool, including currently healthy customers, the ACA established the individual mandate to buy insurance and a monetary penalty for not doing so. The Republicans fought the mandate in court and lost. They also litigated the Medicaid expansion the ACA originally required of the states. They won, making it optional for the states to participate. This left a large population of working poor, uninsured people in states like Idaho that declined the expansion.

But the nastiest and least appreciated attack came in 2014. During the 2014-2016 changeover period, a temporary “risk corridor” was established to offset possible imbalances in the types of customers insurance companies would get. The ACA established a monetary guarantee, so that insurers with a higher percentage of enrollees during the transition would be subsidized by payments from companies that got a healthier, more profitable mix.

This is where the Republican majority pounced on the ACA, throwing insurance companies into disarray and causing some of them to drop out. They did so quietly and beyond the attention and comprehension of the public. U.S. Sen. Marco Rubio framed the risk corridor as a giveaway to the insurance companies and an “illegal expenditure” by the executive branch. He worked behind the scenes to add provisions to the massive “Consolidated Appropriations Act of 2014” that would sabotage the payments. The House and Senate, whose members must have been exhausted from wrangling, passed the act in January 2014.

A legal challenge to these payments was filed at about the same time, receiving a green light from a single judge whose ruling is now on appeal. Ever since, Republicans have been cherry-picking stories from mostly rural areas where insurance premiums have risen or carriers have dropped out.

The Affordable Care Act is a complex law meant to control prices, in part by fostering competition for business among insurance companies. Its authors knew it would require some fine-tuning. Instead, the ACA met with seven years of Republican attacks.

They now are learning that the wounded Affordable Care Act is preferred by the people over their proposed replacement, the American Health Care Act. If they’re smart, they’ll work across the aisle to nurse the ACA back to health and stop crowing about Thursday’s House passage of their abominable alternative.