St. Louis Post-Dispatch David Nicklaus – Economy column

March 28--The Affordable Care Act has its issues but is not, despite President Donald Trump's dramatic language, either "imploding" or "exploding."

Its future may include a few fender benders that will hurt insurance companies, consumers and the federal budget, but not a fiery crash that would cost millions of Americans their health coverage.

To understand why Obamacare is not about to blow up, let's review what the 2010 law did. It expanded Medicaid, set up a system of exchanges and subsidies and required individuals and businesses to buy policies. It also levied new taxes and rewrote many of the rules of health insurance.

Those rules are working. Some of them -- insurers can't deny coverage because of pre-existing conditions, and children can stay on a parent's policy until age 26 -- are so popular that they were part of Republicans' failed repeal-and-replace bill.

The Medicaid expansion, which covers 11 million people who weren't eligible before, isn't about to explode either. The mandates will work if the Trump administration enforces them.

The exchanges do have problems. Big insurers UnitedHealth, Aetna and Humana have pulled out or scaled back their participation. In many rural areas, including 96 of Missouri's 114 counties, only one company offers insurance on the exchange.

The Congressional Budget Office says the exchanges will probably remain stable. The lack of competition may boost prices, but the vast majority of enrollees receive subsidies. Uncle Sam, not the individual, will bear the higher cost.

"The taxpayer will pay the difference, and that cost is going to go up dramatically," says Joseph Antos, a health care expert at the conservative American Enterprise Institute.

What if that sole insurer pulls out? That's a real danger in Tennessee, where Humana, the only choice on exchanges in 16 counties, is leaving the market next year.

Individuals in those places could buy off-exchange policies, but those aren't eligible for federal subsidies.

"It's a very local crisis," says Cynthia Cox, associate director of health reform and private insurance at the Kaiser Family Foundation. "If that happens on a broader scale next year, it could lead to more political discussion on either repeal-and-replace or fixing Obamacare."

Other insurers still might fill the gap. Centene, a managed-care company that got its start serving Medicaid patients, wants to expand its exchange business. "Because there are federal dollars in there, and 8 or 9 million people, there will be insurers that are willing to take the money," Antos predicts.

The Trump administration could do some small things to help the insurance companies. Already, in February, it proposed to tighten enrollment rules, making it harder for people to game the system and buy insurance only when they get sick.

Such tweaks aside, insurers and consumers appear to be stuck with the 2010 law. The worst fears about it, however, have proven unfounded.

Employers, we were told, might drop coverage and let Obamacare cover their employees. Or the workforce might shrink, because people no longer needed a job to have affordable health care. Neither of those things has happened to any great degree.

"On the whole, the ACA is working smoothly," Cox said, "but the exchange markets, where 5 percent of the population gets insurance, have gotten 95 percent of the media attention."

Even there, the biggest danger is rising premiums and a few gaps in coverage. That qualifies as a problem, but hardly an explosion.

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