This blame game is driving up health insurance costs

WASHINGTON — The Senate is taking baby steps toward a health care bill amid serious disagreement among lawmakers. But the health care industry waits for no one, and insurers are growing increasingly rattled by a combination of inaction in Congress and outright threats of sabotage from the White House.

Customers could soon be paying the price.

Insurance companies, which are reaching deadlines to submit premiums for the individual health care market and to decide whether to sell policies at all, say the uncertainty is driving their premiums higher and their participation lower. These complaints come on top of existing problems in Obamacare markets that would have demanded attention if Democrats had won.

Regardless of what lawmakers do in the long run, the time may have already passed for Congress to rescue the 2018 insurance market from the negative effects of the current debate. Insurers are putting in their initial bids for premiums and will finalize their plans in September. That means even a temporary fix would likely fail to shield customers from the effects of uncertainty.

"We needed to have the answers three months ago," Bob Laszewski, president of Health Policy and Strategy Associates, a consulting firm in Washington, D.C., told NBC News.

With the market rapidly reaching a point of no return, the political fight in Washington could shift from the future of health care to which party is to blame for its present.

The costs of uncertainty

Last week, Blue Cross and Blue Shield of North Carolina announced that it would seek a 22.9 percent increase in premiums for 2018 plans. But it pointedly added that the hike would be just 8.8 percent if Congress and the Trump administration guaranteed subsidies that they're owed for paying out-of-pocket costs for low-income customers.

The company also reserved the right to withdraw entirely because of the "undecided future" of the Affordable Care Act, popularly known as Obamacare.

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Protests for and against Obamacare

Tea Party Patriots supporters hold signs protesting the Affordable Care Act in front of the Supreme Court as the court hears arguments on the health care reform bill on Tuesday, March 27, 2012.

(Photo By Bill Clark/CQ Roll Call)

Affordable Care Act supporters wave signs outside the Supreme Court after the court upheld court's Obamacare on Thursday, June 25, 2015.

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A man holds signs during a protest on the second day of oral arguments for the Patient Protection and Affordable Care Act in front of the U.S. Supreme Court building on March 27, 2012 in Washington, DC. Today is the second of three days the high court has set aside to hear six hours of arguments over the constitutionality President Barack Obama's Patient Protection and Affordable Care Act.

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Sister Caroline attends a rally with other supporters of religious freedom to praise the Supreme Court's decision in the Hobby Lobby, contraception coverage requirement case on June 30, 2014 in Chicago, Illinois. Oklahoma-based Hobby Lobby, which operates a chain of arts-and-craft stores, challenged the provision and the high court ruled 5-4 that requiring family-owned corporations to pay for insurance coverage for contraception under the Affordable Care Act violated a federal law protecting religious freedom.

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An Obamacare supporter counter protests a Tea Party rally in front of the U.S. Supreme Court in the morning hours of March 27, 2012 in Washington, DC. The Supreme Court continued to hear oral arguments on the Patient Protection and Affordable Care Act.

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Affordable Care Act supporters hold up signs outside the Supreme Court as they wait for the court's decision on Obamacare on Thursday, June 25, 2015.

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Ron Kirby holds a sign while marching in protest of the Patient Protection and Affordable Care Act in front of the U.S. Supreme Court on March 26, 2012 in Washington, DC. Today the high court, which has set aside six hours over three days, will hear arguments over the constitutionality President Barack Obama's Patient Protection and Affordable Care Act.

(Photo by Mark Wilson/Getty Images)

A protester waves his bible in the air as he overpowered by cheers from supporters of the Affordable Care Act as they celebrate the opinion for health care outside of the Supreme Court in Washington,Thursday June 25, 2015. The Supreme Court on Thursday upheld the nationwide tax subsidies under President Barack Obama's health care overhaul, in a ruling that preserves health insurance for millions of Americans.

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Nuns, who are opposed to the Affordable Care Act's contraception mandate, and other supporters rally outside of the Supreme Court in Washington, D.C., U.S., on Wednesday, March 23, 2016. On Wednesday morning, the Supreme Court is scheduled to hear oral arguments in Zubik v. Burwell, a consolidated case brought by religious groups challenging a process for opting out of the Affordable Care Act's contraception mandate.

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Supporters of contraception rally before Zubik v. Burwell, an appeal brought by Christian groups demanding full exemption from the requirement to provide insurance covering contraception under the Affordable Care Act, is heard by the U.S. Supreme Court in Washington March 23, 2016.

(REUTERS/Joshua Roberts)

Protestors hold placards challenging 'Obamacare' outside of the US Supreme Court on March 4, 2015 in Washington, DC. The US Supreme Court heard a second challenge to US President Barack Obama's Affordable Care Act. The US Supreme Court faces a momentous case Wednesday on the sweeping health insurance reform law that President Barack Obama wants to leave as part of his legacy. The question before the court is whether the seven million people or more who subscribed via the government's website can obtain tax subsidies that make the coverage affordable. A ruling is expected in June.

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 Linda Door (L) protests against President Obama's health care plan in front of the U.S. Supreme Court Building on March 26, 2012 in Washington, DC. Today the high court, which has set aside six hours over three days, will hear arguments over the constitutionality President Barack Obama's Patient Protection and Affordable Care Act.

(Photo by Mark Wilson/Getty Images)

Supporters of the Affordable Care Act celebrate after the Supreme Court up held the law in the 6-3 vote at the Supreme Court in Washington June 25, 2015. The U.S. Supreme Court on Thursday upheld the nationwide availability of tax subsidies that are crucial to the implementation of President Barack Obama's signature healthcare law, handing a major victory to the president.

(REUTERS/Joshua Roberts)

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In other states, insurers are already pulling out of the market. When Blue Cross and Blue Shield of Kansas City withdrew, it left 25 counties without an insurer and many others with only one. In announcing the move, the company cited major losses of more than $100 million but also the "uncertain direction" of the market.

President Donald Trump has repeatedly hinted that he might cut off the cost-sharing payments, which are the subject of a House Republican lawsuit against the Obama administration, as a way to put political pressure on Democrats.

America's Health Insurance Plans, or AHIP, the nation's leading insurance lobby, has demanded that the White House and Congress resolve the subsidies immediately — or take the blame for hurting consumers.

"This uncertainty is arguably the single most destabilizing factor in the individual market, and millions of Americans could soon feel the impact of fewer choices, higher costs, and reduced access to care," Cathryn Donaldson, a spokeswoman for AHIP, said in an email.

Sen. Susan Collins, R-Maine, has urged lawmakers to address the issue.

"Those subsidies are not only important to stabilize the insurance markets, but they're absolutely vital to low-income individuals," she told NBC News.

See states hit hardest by Trump's Medicaid budget

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Kentucky

Change in enrollment from before the Affordable Care Act to March, 2017: 100-125%

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Colorado

Change in enrollment from before the Affordable Care Act to March, 2017: 75-100%

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Nevada

Change in enrollment from before the Affordable Care Act to March, 2017: 75-100%

(Photo via Getty Images)

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But others see any fallout as the Democrats' fault for drafting their bill improperly, which is the basis of the lawsuit: Sen. John Barrasso, R-Wyoming, blamed former President Barack Obama for "making illegal payments" when asked about the recent insurer news.

The situation is growing turbulent enough that Sen. Ron Johnson, R-Wisconsin, told NBC News that he could support separate legislation to shore up markets while Congress works on a full Obamacare replacement.

"If we have to break this and do something short term to stabilize the markets, I would support that," Johnson said.

But Johnson added that his take "may be a minority view" within the Republican Party, which is uneasy with any move perceived as bolstering the Obamacare framework. Given Trump's discussion of using failing insurance markets as a political cudgel against Democrats, the president could also veto such an effort.

Blame game

Policy experts say the cost-sharing subsidies are only one of many factors upsetting the markets. Insurers are also concerned that the White House might decline to enforce the individual mandate or refuse to adequately advertise during enrollment periods, something that happened briefly after the inauguration.

Then there are the many variables in Congress: AHIP and some insurance executives criticized the House bill that passed in May, and there are few clues as to how the Senate will respond, or when, or whether it will be able to get legislation to the president's desk at all.

"Republicans haven't really done anything to signal that the non-group market will ever become a viable business proposition," said Joe Antos, a scholar at the conservative American Enterprise Institute.

Finally, there's Obamacare's own problems.

In many places, the insurance markets have attracted more sick customers and fewer healthy customers than had been hoped. Even before Trump took office, there was a rash of premium hikes averaging 25 percent nationwide this year, as well as a major decline in the number of available plans, although no counties were left with zero options.

Obamacare's subsidies made up the difference for many customers, but those whose incomes were too high to qualify have faced steep new costs.

The stew of factors muddies responsibility and has left each party rushing to tar the other with negative headlines.

"Obamacare is collapsing under its own weight, and BCBS [Blue Cross/Blue Shield] itself is leaving Kansas and Missouri as a consequence," a White House spokesman said. "The rising costs of health care predate the Trump administration."

Republicans were quick last week to bring up the North Carolina and Missouri news as evidence that Obamacare needed to be replaced.

See the group working on healthcare

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U.S. Senator Tom Cotton (R-AR) (L) and Senator David Perdue (R-GA) (R) unveil legislation aimed at curbing legal immigration by halving the number of legal immigrants admitted into the United States, at the U.S. Capitol in Washington, U.S. February 7, 2017. REUTERS/Jonathan Ernst
U.S. Senator Cory Gardner (R-CO) smiles after he was ceremonially sworn-in by Vice President Joseph Biden in the Old Senate Chamber on Capitol Hill in Washington January 6, 2015. REUTERS/Larry Downing (UNITED STATES - Tags: POLITICS HEADSHOT)
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"This plan simply hasn't worked, it isn't working, and it is going to get worse before it gets better," Sen. Roy Blunt, R-Missouri, said in a floor speech.

But Democrats were eager to bring up the news, as well. Senate Democratic leader Chuck Schumer of New York spoke on the floor warning of Republican "sabotage" and predicted that his rivals would face the wrath of voters if they tried to pawn off responsibility.

"When people get a bad health care bill, you can blame anyone you want," he said last week. "You are in charge."

Looking to seize the legislative high ground, Sen. Claire McCaskill, D-Missouri, introduced a bill that would allow people in counties that lack insurers to access the same exchange plans as members of Congress.

"I knew that the president had expressed his desire to sabotage people's insurance coverage, so I anticipated that this would happen," she said, referring to the pullout of Blue Cross and Blue Shield of Kansas City. The measure, she said, "is an immediate fix, and we ought to get an immediate vote."

The state of play

Despite Obamacare's ongoing struggles, outside analysts said the exchanges appeared to be in better shape earlier this year as insurers adjusted their prices to meet the environment.

Sabrina Corlette, a professor at the Center on Health Insurance Reforms at Georgetown University who has been tracking insurers' quarterly earnings, said companies' comments to shareholders have grown more upbeat even as they warn that uncertainty in Washington raises new risks.

"There's probably some blame on all sides, but my perspective is that while many carriers faced significant challenges in the rollout of Obamacare's marketplaces, things were starting to stabilize financially," she said.

The nonpartisan Congressional Budget Office reached somewhat similar conclusions in its evaluation of the House health care bill last week.

Buried in the report, the CBO assessed that the markets should be "stable in most areas" in the absence of any changes. But the agency added that "several factors could lead insurers to withdraw from the market — including lack of profitability and substantial uncertainty about enforcement of the individual mandate and about future payments of the cost-sharing subsidies."

There's also the question of whether the Republican plan would address the growing consumer difficulties on the insurance market. The House bill would cover 23 million fewer people while raising out-of-pocket costs for many customers and hiking premiums for older low-income Americans, according to the CBO.

Democrats, for their part, have suggested a variety of alternative fixes. headlined by a public insurance option, but there's little sign that the two parties would cooperate without a major shift in the political landscape.

"We're not going to waste our time talking to people who have no interest in fixing the problem," Senate Republican leader Mitch McConnell of Kentucky said last week.

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