Obamacare ‘not in death spiral’? The case near Trump’s Palm Beach door

April 21--Love the health law or loathe it, but Obamacare is "not in a death spiral" without a little shove from its current caretakers in Washington, according to a new report -- and Exhibit A for this case sits outside the back door of President Trump's Mar-a-Lago estate in Palm Beach.

Florida Blue confirmed after-tax profitability in the "high single digits" for individual plans on and off the ACA marketplace, a company spokesman told The Palm Beach Post.

"We were pleased by our performance in the ACA business in 2016, and appreciated the opportunity to serve our members across the state," spokesman Paul Kluding said.

Trump has warned Obamacare will "explode."

But S&P said the "ACA individual market is not in a death spiral" -- unless Trump and Congress send it in that direction by blocking billions of dollars in subsidies that hold down consumer costs.

Without that money, insurers are likely either to bail out of 2018 ACA markets or raise premiums an average of 19 percent nationally and 25 percent in Florida, second most in the nation, a Kaiser Family Foundation study has calculated.

Has all this been free of complaints and problems? No. Insurers including Jacksonville-based Florida Blue have tried a variety of ways to control costs, such as tightening networks of medical providers on some marketplace plans.

Florida Blue customers in Palm Beach County told The Post about frustrations such as doctors suddenly disappearing from company plans when consumers tried to use them. Customer Jeff Gordon of Boynton Beach last year called it a "classic bait and switch."

Company officials apologized and pledged to work hard to line up consumers with other providers.

Then, too, what insurers see as financially healthy can strike others, like single-payer advocates, as just corporations grabbing a big middleman's hunk of their hard-earned dollars.

The 2010 federal health law tries to address that. Insurers can be required to give rebates to customers if they don't spend at least 80 percent of premiums providing care for members. Rebates have not yet been determined for 2016 under a formula that comes with its own set of costs and adjustments and can vary by individual subsidiaries within the company, Kluding said. Filings are not due for a couple of months, he said.

But in terms of financial stability, most Blue Cross companies serving ACA marketplaces across the country have improved significantly from 2014 to 2016, S&P analysts found. In theory, that points to a reduced need to raise premiums as insurers better line up rates with health costs.

"The U.S. ACA individual market shows signs of improvement, as most insurers' 2016 results were better than 2015 results," the S&P analysis found.

Still, the marketplace remains "fragile" in the sense that it is vulnerable to disruptions such as Trump's threat to withhold about $7 billion in "cost-sharing" subsidies, analysts noted.

Cost-sharing money helps cover out-of-pocket consumer costs for things like co-pays and deductibles. It comes in addition to subsidies that lower the premiums that lower-income consumers pay.

A letter Thursday from "safety net" hospital and community groups urged congressional leaders to continue cost-sharing money, in which case "premium increases are expected to instead be in the single digits."

All of this matters now because insurers must decide by June 21 whether to participate in 2018 ACA markets and what premiums to charge.

House leaders have declined to drop a lawsuit challenging the cost-sharing money in a case whose next hearing is set for May 22.

The uncertainty alone has had an impact. Two major insurers have pulled out in Iowa.

By his own account this month, Trump has tried to use the cost-sharing money as leverage to get Democrats to the negotiating table to help replace health law.

"I don't want people to get hurt," Trump told The Wall Street Journal. "What I think should happen -- and will happen -- is the Democrats will start calling me and negotiating."

The Senate's top Democrat, Chuck Schumer of New York, responded, "President Trump is threatening to hold hostage health care for millions of Americans, many of whom voted for him, to achieve a political goal of repeal that would take health care away from millions more. This cynical strategy will fail."

The administration is "currently deciding" about subsidies, a statement from the U.S. Department of Health and Human Services said.

An initial move to roll back close to $1 trillion in Obamacare taxes on companies and high earners and hand control largely to the states alarmed people who feared losing coverage or facing higher costs. Some 24 million people would have been pushed out of health insurance, the Congressional Budget Office forecast about a failed House attempt to overhaul the law in March. The replacement plan's popularity in polls: 17 percent.

That's why the administration either has to get it right on a better way, or look out the back door and decide whether to embrace Not Necessarily A Death Spiral.

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