The man who runs the second-largest Obamacare exchange says the Trump administration is causing a ‘s—storm’ in the insurance market

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  • Peter Lee is the executive director of Covered California, the state’s Obamacare insurance exchange and the second-largest exchange by enrollees in the country.
  • Lee said the Trump administration has taken major steps to undermine the Affordable Care Act in 2017 and that will cause problems in 2018.
  • He said the problems are “now on President Trump.”

It’s about to get ugly in the Obamacare insurance market, according to the man that runs Covered California, the second-largest individual insurance exchange in the country.

Peter Lee, Covered California’s executive director, told Business Insider in an interview that the Trump administration has thrown a wrench into insurance exchanges under the Affordable Care Act that were on their way to stabilizing themselves in 2017. Lee even agreed with Trump’s assessment that Obamacare is “gone” — but perhaps for a different reason than Trump intended.

“So I think there is a truth to it — Obamacare is gone,” Lee said. “The reality is what is going to come home to roost for this president and this Congress is a collapsed individual market that was working well.”

Lee said research from the Kaiser Family Foundation and Standard and Poor’s pointed to increased insurer profitability and strong enrollment numbers. Now, that appears to be up in the air heading into the 2018 open-enrollment period.

“If you look at all of this research, 2017 was going to be the big turnaround year and now 2018 is going to be a s—storm,” Lee said. “It is going to be a nightmare for much of country with some islands of calm, relatively speaking.”

Already, a study by healthcare consulting firm Avalere Health projected that premiums for the lowest cost silver-level plans on the Obamacare exchanges would increase by 34% in 2018. Benchmark silver plans, which are the second most expensive, went up by only 26% in 2017.

Avalere said the increase was, in part, due to Trump’s elimination of so-called cost-sharing reduction payments and “general volatility around the policies governing the exchanges.”

Lee said that while consumers would be insulated from those increases for the most part, thanks to federal subsidies, it is an example of the ways White House interference has caused problems for the Obamacare exchanges.

Lee cited several examples of how the Department of Health and Human Services helped to undermine the market, including cutting off the critical cost-sharing reduction (CSR) payments, slashing funding for open enrollment that encourages people to sign up for plans on the Obamacare exchanges, and shortening the open-enrollment period to six weeks from 12.

California is making up for this lack of spending with a huge outreach campaign of their own, but Lee said the rest of the country will not be so lucky and it could lead to serious consequences down the road.

“But I think in a lot of other parts of the country, you’re looking at a federal government not spending money on marketing, you’re looking at uncertainty around CSRs,” Lee told Business Insider. “Without that certainty, I think there’s the risk of having hundreds of bare counties in 2019 and mammoth rate increases.”

Ultimately, Lee said all of these changes add up to one truth: Trump now owns any problems that crop up in 2018.

“This is now on President Trump, the healthcare market is not about President Obama anymore,” Lee said. “They are the responsibility of this president, and they have to be owned by this president.”

SEE ALSO: New study says Obamacare premiums will soar 34% in 2018 — in large part because of Trump

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