Is Obamacare 2019 already doomed to fail?

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Myles Ma, CPFCSenior ReporterMyles Ma, CPFC, is a senior reporter and certified personal finance counselor at Policygenius, where he covers insurance and personal finance. His expertise has been featured in The Washington Post, PBS, CNBC, CBS News, USA Today, HuffPost, Salon, Inc. Magazine, MarketWatch, and elsewhere.

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Open enrollment for 2018 individual health care plans closed little more than a month ago in some states, but there's already signs the health insurance marketplaces will face headwinds this fall.

Idaho wants to offer plans that don't follow former President Barack Obama's health care law. Twenty states are suing to get Obamacare repealed.

The tax penalty for foregoing health insurance, formerly known as the individual mandate, is gone after this year. And the Trump administration has moved to expand short-term health insurance and association health plans as an alternative to Obamacare health insurance.

Each move mentioned above has been met with the same prognostication: Premiums for plans on the individual marketplace will increase, causing fewer people to sign up. Signing up for Obamacare 2018 was chaotic and, for people ineligible for premium subsidies particularly, expensive.

Could 2019 open enrollment be worse?

Rates up, enrollments down

Open enrollment for next year doesn't start until November, but insurers have already started to set the rates they'll offer on the exchanges.

"I think the one absolute is insurance rates will be very high in 2019," said Trish Riley, executive director of the National Academy for State Health Policy.

That's because there's still lots of uncertainty around the individual market and Congress hasn't done anything to make them less risky for insurers, Riley said. It's too early to say exactly how open enrollment will go, but there's risk of people having fewer affordable options for health insurance.

The number of people enrolling is also likely to fall, said Matt Fiedler, a fellow at the Center for Health Policy at Brookings. The repeal of the individual mandate and the planned expansion of short-term health insurance plans will likely combine to pull healthier people away from the marketplace, especially if they don't get a subsidy, he said. Their retreat could lead to a vicious cycle, as the marketplace becomes more unaffordable, causing more people to leave.

All eyes on lawmakers

"We don't want to be too 'sky is falling' because we don't know what the Congress will do," Riley said.

There is talk of fixing and repealing Obamacare in Washington. Congress is considering creating a reinsurance pool (a fund that helps insurers pay for big claims) to help stabilize premiums, Riley said. There's also support to restore funding for cost-sharing reduction payments, which help lower-income people pay for out-of-pocket health care costs, she said.

Efforts to stablize the marketplaces, however, hit yet another a roadblack just this week, after the Trump administration issued contentious demands, including reintroducing insurers' ability to charge older people higher rates, to back any bipartisan effort.

Outlook hazy, try again

The rule expanding short-term health insurance — often referred to as "junk health insurance plans" by critics — is still in the comment phase. Even if it's finalized, there will be further oversight from the states to help protect consumers, so the rule is far from finalized, Riley said.

Meanwhile, many states are considering restoring the individual mandate, which was overturned as part of the GOP tax bill signed into law in December. The New Jersey senate advanced a bill Monday that would do just that, reported. Similar measures have moved forward in Minnesota and Wisconsin.

Obamacare has shown resilence

The good and bad news is open enrollment is still a few months away. Insurers, consumers and states have a little time to adjust to market conditions. On the other hand, anything can happen. Riley pointed out that it wasn't until November last year that President Donald Trump cut federal funding for cost-sharing reduction payments.

Despite the last-minute wrench in the works, states were able to adjust and enrollment was surprisingly steady. About 8.8 million Americans signed up for a 2018 health insurance plan through, a small drop from the 9.2 million people who signed up for a 2017 plan. (Those numbers exclude Americans who enrolled through the state exchanges.)

In addition, the Affordable Care Act is polling better than ever, according to the Kaiser Health Tracking Poll, with more than half the public holding a favorable few of the law. A whopping 84% of Americans even believe federal support for the Medicaid expansion — a part of the law Republicans have long found contentious — remain in place, per another Kaiser survey.

"There are signs we can weather the storm," Riley said.

"I think the marketplace is going to survive," said Fiedler. "But fewer people will be enrolled and premiums will be higher than they need to be."

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