When President Donald Trump pledged to “let Obamacare fail” last month after Republican efforts to restructure the health care law hit a dead end, he was really just nudging lawmakers to act before the insurance marketplace collapses.
At least that’s what former Utah Gov. Mike Leavitt believes.
“He was essentially saying if we don’t do something, [it] will fail,” Leavitt suggested Monday in an interview with The Salt Lake Tribune. “It was a way of challenging Congress to do their job. I really don’t believe that anybody sees it in the interest of Americans to do nothing.”
The nation faces an impending crisis if Congress and the president don’t act, said Leavitt, who served as former President George W. Bush’s secretary of Health and Human Services and advised Trump’s transition team. Either the Affordable Care Act, the namesake achievement of the Obama administration, needs to be improved — and quickly — or legislators should come up with something stable to replace it with, he cautioned.
“Simply allowing it to collapse without making that effort seems undesirable,” Leavitt said, noting that “ordinary people with real needs” could be irreparably harmed by an abrupt loss of coverage.
The conservative Leavitt joined two other former Health and Human Services secretaries — Kathleen Sebelius, a Democrat who served under former President Barack Obama when the individual marketplace was rolled out, and Tommy Thompson, a Republican who also worked in the Bush administration — in calling on Congress to avoid disaster and stabilize Obamacare, warnings first reported by The Associated Press.
Trump recently threatened to end federal payments to insurers, calling the funds “bailouts.” Cutting off that money could result in 20 percent higher premiums for those who buy through the marketplaces, according to an estimate from the nonpartisan Congressional Budget Office.
“In an environment in which [insurance] companies are enrolling customers, they’ve got a lot of time to actually go back to the drawing board and figure this out,” Sebelius said. “The worst of all worlds for them would be to have the current situation unravel because of decisions by this administration.”
While Trump weighs discontinuing the subsidies, Leavitt worries it’s only adding to the current confusion, uncertainty and “dysfunction.” To stave off an Obamacare implosion, he believes the White House and Congress instead should start by restructuring risk pools to lessen the burden on insurers.
Health insurance companies are losing billions of dollars, Leavitt said, by adhering to the Obamacare requirement that they not charge older individuals any more than three times the premium price for younger, healthier clients. Because many providers cannot afford to do that, he added, they’re fleeing the marketplace.
Leavitt, founder of Leavitt Partners and board member of HealthEquity, both companies involved in health care financial services, believes insurers will continue to bolt unless there’s bipartisan reform.
Molina Healthcare pulled out of Utah’s Affordable Care Act marketplace earlier this month, citing a $230 million loss in the second quarter. That left just two insurers, SelectHealth and University of Utah Health Plans, on the state’s exchange.
“There are serious flaws in the law,” Leavitt said, “and they need to be fixed.”
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