However Republicans’ plan to repeal and replace the Affordable Care Act turns out, Wall Street investors and analysts just want certainty from the Trump administration.
But certainty is proving an exceedingly scarce commodity for those with an eye on the future of the healthcare industry.
“We haven’t the foggiest idea” what will happen with repeal and replace, Sheryl Skolnick of Mizuho Securities USA said at the Wall Street Roundtable held by Brookings Institution on Tuesday in the District of Columbia.
Guaranteed issue of insurance combined with the promise of affordability for consumers are fundamentally competing goals--a mess the Republicans are now tasked with cleaning up, Skolnick said.
The challenges facing the ACA exchanges--including high premiums and insurer departures--are driven by a more "fundamental problem" that isn’t likely to be solved by any concoction of policy fixes, according to Skolnick.
That problem, she said, is that the only people who want insurance in the individual markets are sick people. It constructs an “impossibility theorem” for actuaries, she said, and it is not likely that actuaries will be able to dramatically improve pricing for individual products in the future.
Ana Gupte of Leerink Partners added that the individual mandate hasn’t worked, evidenced by the fact that many 18- to 34-year-olds who have not signed up and instead elected to take the penalty.
Yet Matthew Borsch of Goldman Sachs argued it is not necessarily always true that the only people who want insurance are sick people.
Matthew Borsch basically makes case for the ACA replacement through tweaks outlined by @onceuponA: https://t.co/TpsVBAIHvj #wallstroundtable
— Loren Adler (@LorenAdler) November 15, 2016
He said policymakers can look to Medicare Part B--where people are automatically enrolled at age 65 and must keep continuous coverage--as an example of how legislators could effectively address the adverse selection dynamics plaguing the ACA marketplaces.
Related: Financial experts split on impact of ACA repeal and replace
Borsch also noted that the departures of Aetna, Humana and other large insurers doesn’t signal the death spiral of the exchanges, pointing to the variety of Blue Cross Blue Shield plans that are still offering individual products as well as Centene and Molina.