Republicans have a problem. Their plan to repeal and replace Obamacare won’t work unless they repeal first because Democrats will not be motivated to work on a replacement. However, since Republicans don’t have a replacement bill ready, it could be some time before a replacement, especially one that requires Democratic support, is in place. The current plan to solve this problem is being called repeal and delay, i.e. repeal Obamacare but phase it out over several years so Congress can work on the replacement.

As Ed highlighted earlier today, repeal and delay has a big problem. Specifically, once the GOP repeals Obamacare, even if that includes a multi-year phase out, there is no reason for insurers to remain in the marketplace. Many of the top insurers have already abandoned the exchanges and most of those who haven’t are losing money. Once the marketplace is formally killed by repeal, most insurers would cut their losses, leaving no one to offer plans during the ‘delay’ phase of repeal and delay.

So how do you keep zombie-Obamacare going when everyone involved knows it is dead? You pay the insurers to stick around. Here’s insurance industry expert Bob Laszewski’s take from an interview at Vox:

What you do is subsidize the carriers. You reactivate some of the policies that were meant to stabilize the marketplace in the early years, the three R’s…

But these are the things that Republicans have hated. This is what they call an insurance company bailout. But keeping them around is the only way to maintain a viable market. The problem is when you have an insurance market and the new administration declares it DOA, it will go into death throes. It will be a death spiral. The Trump administration will have put it in a death spiral. The only way to fix that is if you subsidize the market. If you just subsidize the consumers, that doesn’t do any good if you don’t subsidize the carriers.

Sen. Marco Rubio has been praised on the right for making one of the three Rs, risk corridors, budget neutral. That move prevented the administration from handing billions over to Obamacare insurers who lost money on the program and led to some insurers dropping out and a number of co-op closures. Now, according to a story at the Hill, the GOP is thinking seriously about reviving the bailout, albeit without making it look like they are reviving the bailout:

One Republican lobbyist said that in discussions about a plan to repeal the Affordable Care Act without a replacement, insurers are “painting a picture of the market that isn’t very pretty and Republican staffers are getting the picture.”

“They want to pump money back in to the insurers without appearing like they’re giving them a handout or bailing them out,” the lobbyist added…

[A second lobbyist] said Republicans are discussing: “What’s the impact on the 2018 plan year for that, and if it’s as bad as some people say, what are our options to mitigate the impact without looking like we’re bailing out the health insurance industry?”

Whatever the Trump administration comes up with may not be a direct revamp of the risk corridor or one of the other programs, but the bottom line is that some financial enticement will be necessary to make it worth the insurers while to stick with a zombie-health exchange once it has been repealed.