Insurers could get stronger after Obamacare — if they survive the transition - Axios
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Insurers could get stronger after Obamacare — if they survive the transition

Nati Harnik/AP

Obamacare didn't kill the health insurance industry, and whatever comes after won't kill it either — as long as it can scrape through the next few years.

There's been a lot of nervous talk from insurance CEOs about how they need to know what's happening next. That's a real problem, as Republicans struggle to figure out what they're actually going to do about Obamacare. But the bigger picture looks much better.

Wall Street analysts are betting health insurers — who have mostly thrived under Obamacare despite their recent setbacks — will become even stronger under Donald Trump and Republicans, who plan to shred regulations and push more taxpayer-funded programs into private control.

What's at stake: Roughly 10.4 million people bought coverage through Obamacare's exchanges and kept it in 2016. It's unclear how that number will change based on the 2017 open enrollment, which just ended last week. While Aetna, Humana, UnitedHealth Group and some other insurers have abandoned the marketplaces, Blue Cross Blue Shield plans, Medicaid-based plans and not-for-profits still have sizable interests.

What's next: Republicans have signaled they will repeal the law immediately and replace it with something else down the road. But without critical details, like how they'll get enough healthy customers without the individual mandate, even the most committed insurers have little incentive to remain in a marketplace that could implode from lower enrollment or a worse risk pool. Anthem and Molina, for example, have already started hedging their commitments.

Companies need to know a replacement timeline soon, since they have to file 2018 Obamacare plans by the spring and will prepare for 2019 soon after.

"There has to be a pretty long runway to what the next system is going to be," said Ceci Connolly, CEO of the Alliance of Community Health Plans, which represents large provider-based insurers like Kaiser Permanente and UPMC.

She said the industry is pushing for at least a three-year transition period. Anything less could drive insurers away. One sign of nervousness: Companies are already reviewing state laws to see what it would take to exit if, for example, Obamacare's cost-sharing subsidies are revoked.

"It would be irresponsible to not understand what options are available," Connolly said.

Congress can persuade insurers to stay in the exchanges with a couple enticements:

  • Loosening regulatory requirements, especially around benefits. Paring back Obamacare's required benefits has been a rallying cry for almost all insurers, but consumer advocates worry that could bring back the days of exhaustive medical underwriting and junk insurance. "There's an extreme you wouldn't want to go to, but we need to see a relaxation," said Dr. John Bennett, CEO of CDPHP, a not-for-profit health insurer in New York.
  • Paying out risk corridors. Insurers selling in the exchanges are still owed more than $8 billion in risk-corridor payments — one of the ways they were supposed to be compensated for covering a lot of expensive people. Depending how Congress acts, that money may go unpaid.

Republicans have derided Obamacare's temporary risk corridors as government "bailouts," even though the same program exists in Medicare Part D. But that funding could help insurers stay and prevent a marketplace collapse if Congress delays an Obamacare replacement.

Highmark, the Blue Cross Blue Shield plan based in Pittsburgh that is suing the feds over unpaid risk corridors, is encouraging the government to "live up to its financial commitments." Republicans could dress up the money with a different name or through state-based funds, Connolly said.

The big picture still looks good. For all the political attention the Obamacare exchanges receive, that market represents just a sliver of the money insurers handle. Financial analysts are bullish toward insurers because other business segments don't face the same kind of crippling uncertainty as the exchanges.

  • Coverage from big employers. Even if Republicans pass their own version of Obamacare's "Cadillac tax" on generous benefit plans — a stretch given wide opposition from employers and unions — the main change to coverage will be the continued cost shift to workers. That's a positive for insurers, but it could inflame the populist outrage over out-of-pocket costs.
  • Medicare Advantage. The private program enrolls a third of Medicare enrollees and offers a stable profit for plans that can boost membership and code medical diagnoses aggressively. Both parties now heavily defend Medicare Advantage because of its rising popularity among seniors. Insurers expect Congress and the Trump administration to shovel incentives the program's way.
  • Medicaid managed care. Virginia, for example, recently announced that Aetna, UnitedHealth and five other companies won a contract for the state's $3.5 billion program that manages Medicaid's long-term care. It's worth noting, however, that insurers aren't fans of block grants, which would cut revenue and complicate contracts.

Roy Moore refuses to concede

Republican U.S. Senate candidate Roy Moore looks at election returns. Photo: Brynn Anderson / AP

Republican candidate Roy Moore said late Tuesday night that the election for Alabama's U.S. Senate seat wasn't over.

"God is always in control. Part of the problem with this campaign is we've been painted in an unfavorable and unfaithful light. We've been put in a hole, if you will...what we've got to do is wait on God, and let this process play out...The votes are still coming in and we're looking at that." However, Alabama's Secretary of State told CNN the people of Alabama had spoken, and Doug Jones was the winner.

Go deeper: How Alabama elected Doug Jones.


Winners & losers from the Alabama special election

Photo: John Bazemore / AP

A Democrat will serve as an Alabama Senator for the first time in two decades after Republican Roy Moore's campaign collapsed following allegations of child sexual abuse.

Why it matters: This is a big, unexpected win for Democrats, and follows another key victory in the Virginia governor's race. It's bad news for the Steve Bannon brand of conservatism and President Trump, who went all in for Moore in the closing weeks.


  • Doug Jones, who had never run for public office before, and won as a Democrat in a red state.
  • Democrats​ now have another important notch on their belt, and will close the gap in the Senate to 51-49.
  • #MeToo: Many voters believed Moore's accusers, and the accusations brought down his campaign.
  • Mainstream Republicans: Moore's baggage would have presented plenty of problems for the GOP down the road, even if they are losing a vote in the Senate.


  • Roy Moore: He did the unthinkable, and lost to a Democrat in a statewide Alabama race.
  • Steve Bannon: He was the one promoting Moore from the beginning, over fierce objections within his own party.
  • The Republican Party: The RNC and the president backed an accused sexual predator, and lost. They're also now down a Senate seat.
  • President Trump: He decided to throw his full-throated support behind Moore, and in so doing made his second incorrect bet on the Alabama race. Not to mention, he was the one who appointed Jeff Sessions as Attorney General — considering it a safe seat.

Trump, Biden, Clinton react to Doug Jones' victory over Roy Moore

Democrat Doug Jones pulled out a victory over Republican Roy Moore on Tuesday night, after a race that was turned on its head by allegations of child sexual abuse against Moore. Moore was the second Alabama Republican endorsed by President Trump to lose, after he Moore defeated Trump-backed Luther Strange in the primary. Trump congratulated Jones on "a hard fought victory."


Both Trump-endorsed candidates lose in Alabama

Trump told voters to elect Roy Moore. Photo: AP

President Trump has now twice endorsed the losing candidate in Alabama. He backed Luther Strange in the Republican primary, and threw his weight behind Roy Moore for the general election. Moore was defeated by Democrat Doug Jones tonight.

The big picture: Trump won Alabama by almost 20 points in the 2016 election, but Alabama voters rejected his favored candidates in the Senate race. The same thing happened on Nov. 8 in Virginia, when voters elected Democrat Ralph Northam over Trump-backed Republican Ed Gillespie by a 9-point margin.


Alabama voters reject Roy Moore, elect Democrat Doug Jones

Doug Jones. Photo: Brynn Anderson / AP

Democrat Doug Jones has defeated Republican Roy Moore for the Senate seat held until recently by Attorney General Jeff Sessions. Moore was overwhelmingly the favorite until nine women accused him of sexual misconduct.

Why it matters: Alabama is a deep red state that went 62% for President Trump and hadn't elected a Democrat to the Senate in 25 years. Trump endorsed Roy Moore, recorded a robocall on his behalf and labeled Jones a "Pelosi/Schumer Liberal Democrat." The defeat will narrow the Republican margin in the Senate to 51-49.

Go deeper: Meet Doug Jones ; Results map ; Trump's picks go 0-2


Results from Alabama as Jones defeats Moore

Data: Decision Desk HQ; Graphic: Chris Canipe, Lazaro Gamio and Gerald Rich / Axios

In a result that seemed unthinkable just weeks ago, Democrat Doug Jones defeated Republican Roy Moore to claim the Senate seat held until recently by Attorney General Jeff Sessions. Moore's campaign collapsed following accusations of child sexual assault against him.

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FBI agents on Russia probe called Trump an "idiot"

Photo: AP

Two FBI agents who were assigned to investigate alleged collusion between the Trump campaign and the Kremlin exchanged text messages in which they referred to President Trump as an "idiot," Politico reports, citing copies of the messages provided to Congress by the Justice Dept.

The backdrop: Special Counsel Robert Mueller fired one of the agents, Peter Strzok, from the investigation in late July, "immediately" after he learned of the text exchange, the Justice Dept. told Congress. Lisa Page, the other agent in question, had already left Mueller's team by that point.


Schumer calls cops after forged sex scandal charge

Photo: J. Scott Applewhite / AP

Senate Minority Leader Chuck Schumer (D-N.Y.) said he was the victim of a fake news hit on Tuesday, and has turned over to Capitol Police a document that purports to detail lurid sexual harassment accusations by a former staffer.

Why it matters: This was an apparent effort to dupe reporters and smear a senator — both symptoms of an amped-up news environment where harassment charges are proliferating and reporters have become targets for fraud.

  • The former staffer told me in a phone interview that she did not author the document, that none of the charges ring true, and that her signature was forged.
  • She said she had never heard of the document before Axios took it to Schumer's office for comment on Tuesday.
  • Matt House, Schumer's communications director, told me: "The document is a forged document and every allegation is false. We have turned it over to the Capitol Police and asked them to investigate and pursue criminal charges because it is clear the law has been broken."
  • House continued: "We believe the individual responsible for forging the document should be prosecuted to the fullest extent of the law to prevent other malicious actors from doing the same."

The backstory:

  • A password-protected PDF of the 13-page document was shopped to Axios and other outlets. The document, which is dated 2012 and has the file name "Schumer_Complaint," looks like a lawsuit filed in U.S. District Court for the District of Columbia.
  • One of many red flags: No lawyer for the staffer is named.
  • The woman named in the document was a legislative staffer for Schumer from 2009 to 2012, and is now a career employee of the federal government.
  • The former staffer said she took the matter to Washington, D.C. police on Tuesday. She said the police told her they were unsure of their jurisdiction in the case. She said she now plans to go to Capitol Police.
  • She told me in a statement: "The claims in this document are completely false, my signature is forged, and even basic facts about me are wrong. I have contacted law enforcement to determine who is responsible. I parted with Senator Schumer's office on good terms and have nothing but the fondest memories of my time there."
  • Axios agreed to her stipulation that she not be named, because she said she is the victim of a crime.

A source close to Schumer said the document is full of errors:

  • "The document contains an allegation of inappropriate behavior on September 16th 2011 in Washington, but Schumer was in New York City."
  • "It contains an allegation of inappropriate behavior by Schumer on August 25th 2011 in Washington, but Schumer was in France."
  • The source tells Axios that reporters from the Washington Post, CNN, BuzzFeed, The New Yorker and ABC all inquired about the document Tuesday.

Be smart: Look for more hits like this, aimed at victimizing both reporters and public figures.

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In tax plan negotiations, corporate rate currently sits at 21%

Rubio. Photo: Pablo Martinez Monsivais / AP

The corporate tax rate currently stands at 21%, according to three sources familiar, as lawmakers work to finalize the tax bill they hope to vote on by next week.

  • Why it matters: Both the House and Senate passed bills that would cut the top corporate rate to 20%, but hours after the Senate bill passed, President Trump said he would accept a 22% rate.
  • Sen. Marco Rubio tweeted on Tuesday, likely referring to reports that the individual rate is being lowered to 37%: "20.94% Corp. rate to pay for tax cut for working family making $40k was anti-growth but 21% to cut tax for couples making $1million is fine?" Rubio had wanted to raise the corporate tax to pay for a more generous child tax credit, but was shut down.

Charming Charlie becomes 20th major retailer to file for bankruptcy this year

Charming Charlie, the Houston-based jewelry and accessories retailer, announced Tuesday that it reached an agreement with lenders and equity sponsors to clear the way for its filing of Chapter 11 bankruptcy.

What went wrong: Charming Charlie's bread-and-butter, affordable jewlery, is an ideal product for online sellers, given that it can be warehoused and shipped cheaply. What's more, even as business migrated online, Charming Charlie overextended itself, opening 79 stores between 2013 and 2015.

Why it matters: It's the twentieth major retailer to have filed for bankruptcy protection in 2017.

Charming Charlie burst onto the retail scene in 2004, with stores uniquely organized by color, and offering products at prices between high-end jewlery stores and discount shops like Claire's, which is aimed at the teenage market.