posted November 21, 2016 04:03 PM            

GOP lawmakers say they plan to repeal the Affordable Care Act as soon as President-elect Donald Trump takes office, including a transition period of a year or two before it takes effect. That way, they satisfy their base while giving notice to 20 million Obamacare customers that they must find other coverage options.

But repealing the law without a replacement is likely to spook health insurers, who might bolt from the markets prematurely to avoid losses as some people stop paying their premiums, while other people rush to have expensive medical procedures before losing coverage. Insurers would have little incentive to stick around without knowing what to expect at the end of the transition. And that could spell chaos for consumers.

"The discussion right now about repeal and replacement is making the market very, very nervous," said Washington Insurance Commissioner Mike Kreidler, a Democrat. "I would not be surprised to see the potential for a stampede to exit the market."

Even if Congress delays immediate action to kill the health care law, Obamacare insurers would have just a few months to decide whether to stay in the law’s marketplaces for 2018. Deep uncertainty about the Republicans’ Obamacare replacement could drive out those companies, cutting off insurance for, potentially, millions of customers.

"A repeal that kicks the can on replace would put the market in serious jeopardy, and the American people will hold them accountable for the results,” Topher Spiro, who heads health policy at the left-leaning Center for American Progress, said on a call with Obamacare supporters last week.

Uncertainty about Obamacare’s future is occurring against the backdrop of strong demand for coverage. More than 1 million people signed up through HealthCare.gov in the first two weeks of the current enrollment season, including 100,000 who enrolled the day after the election, according to the Department of Health and Human Services. The administration projects that 13.8 million people will participate this season, which ends about two weeks after Trump takes office. Millions more — including young adults on their parents' policies and those in expanded Medicaid — will also get coverage this cycle.

“Health care and health insurance is an area where the devil really is in the details,” said Mario Molina, CEO of Molina Healthcare, which is selling exchange plans in nine states. “It’s a big, big issue, and if you get it wrong, it can harm a lot of people.”

Republicans have struggled for six-plus years to agree on an Obamacare alternative. Insurers, to remain in the individual market, would have to bet that the GOP successfully passes new health care legislation in a fraction of that time.

"It would be critically important to have sufficient transition time, and I doubt that one year is enough," said Alliance of Community Health Plans CEO Ceci Connolly. "It's enormously important for the incoming administration and Congress to be very clear about their intentions, because the worst thing for business is uncertainty."

Republicans say they plan to repeal Obamacare through reconciliation, a budget process that requires just 51 Senate votes and guarantees that Democrats can't stand in the way. But the GOP can't eliminate the entire law through reconciliation — just the parts tied to federal funding.

So lawmakers could nix the law's mandate requiring most Americans to buy insurance and the subsidies to help them afford it, but likely couldn't toss the ban on discriminating against people with pre-existing conditions — a policy that Republicans, including Trump, have talked about keeping in some form.

That could leave behind an unworkable coverage system in which insurers must cover everyone regardless of medical condition, while two key policies meant to attract healthier customers — the mandate and subsidies — are eliminated. And insurers would have no guarantee that Congress would come up with a viable replacement.

Iowa Insurance Commissioner Nick Gerhart, a Republican appointee, cautioned last week against repealing the law without a replacement, writing that it would have "devastating consequences in the disruption to people's care."

In the meantime, insurance regulators worry that companies would leave the already fragile Obamacare markets once they're on the brink of extinction.

Insurers voluntarily endured massive losses in the first few years of Obamacare's coverage expansion, hoping the markets would stabilize over the long term. But a number of national and regional insurers decided to cut their losses, leaving the marketplaces this year. Repealing Obamacare would likely give more companies reason to pull out of the marketplaces for the 2018 enrollment season.

Insurers could flee the marketplaces even sooner if Republicans strip away funding for the cost-sharing subsidies insurers provide to low-income customers. House Republicans successfully challenged the legality of that federal spending in court, but the Obama administration is appealing the ruling. Trump could drop that federal appeal on his first day in office, which would mean insurers still have to provide the subsidies but without federal funding. But because of a clause in their exchange contracts, insurers could immediately cut off coverage if the federal government no longer provided cost-sharing subsidies.

States might still be able to compel or persuade insurers to stay in the market for a short period.

Kreidler, for instance, is meeting with three of Washington state's largest insurers later this month, hoping to keep them from leaving the state's marketplace. Obama administration officials have also spent the past week talking with insurers, CMS Acting Administrator Andy Slavitt said.

Publicly, insurers have largely remained quiet since Election Day. But their ties to the individual marketplace could quickly become strained if they don’t see a viable replacement plan taking shape.