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Such arrangements can work only if private firms trust that the United States will be a reliable partner. Historically, this hasnt been a problem.

That appears to be changing. A decline in trust has already caused health insurers to rethink their relationships with their increasingly erratic federal partner. Theyre demanding higher premiums to account for the greater risk. Blue Cross Blue Shield in North Carolina, for example, has said that its planned rate increase of 23 percent next year would be only 9 percent if it had more certainty from the federal government.

Many other insurers have abandoned these partnerships altogether. According to Health Secretary Tom Price, 49 counties wont have a single insurer on the exchanges in 2018.

Why are insurers so skittish? Though much maligned, insurers in the individual market have a tough job. When they set premiums, they have to guess how much health care their enrollees will need. If they set premiums too low, theyll lose their shirts. Too high, and they wont get customers.

Before Obamacare, insurers protected themselves from risk by gathering medical information and screening out people with pre-existing conditions. When Obamacare put a stop to that, insurers were in a bind. They had to set premiums without knowing in advance how sick their customers were. Thats not easy to do which explains much of the fragility of the exchanges over the past three years.

Lawmakers feared all this uncertainty would cause insurers to stay out of the newly formed insurance exchanges. So Obamacare employed a number of tools in particular, financial subsidies and a mandate requiring all individuals to get insurance to reassure firms that the market would be stable and healthy.

Even with protective policies in place, insurers took a big risk entering the markets. At a minimum, insurers that took the plunge deserved the support promised in the law. Congressional Republicans, however, chose instead to sow uncertainty at every turn, hoping that a damaged reform law would be easier to repeal.

These efforts began soon after Obamacare was signed into law. To shield insurers from unexpectedly large losses, the law created a temporary risk corridor program: an upfront financial commitment from the government. Republicans denounced this as a bailout and eventually used an appropriations measure to prohibit the Obama administration from making the promised payments.

As a result, insurers are owed well in excess of $10 billion. Many have sued to recover the payments.

The governments refusal to pay weighs heavily on insurers as they confront two new problems. First, theres the individual mandate, which congressional Republicans hope to repeal. One insurer has already invoked concerns about the mandate as a reason for exiting Iowas market.

Second, Republicans are playing chicken with Obamacare subsidies that are meant to help low-income people cover their out-of-pocket costs. Because insurers dont know whether the government will honor its commitment to pay those subsidies, theyve had to ask for double-digit rate increases.

Republicans appear not to have reckoned with the broader consequences of their uncertainty strategy. For example, Paul Ryan, the House speaker, wants to convert Medicare into a voucher program in which the elderly will shop for private plans. How will that work if insurers, burned by the Obamacare experience, are unwilling partners?

This is perhaps the greatest irony of the Republican actions. Republicans (including one of us) have long believed in the benefits of even greater privatization of government services. But how can any company in any sector trust the United States after seeing health insurers treated so shabbily?

Craig Garthwaite is an associate professor at the Kellogg School of Management at Northwestern University. Nicholas Bagley is a professor of law at the University of Michigan.

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A version of this op-ed appears in print on June 29, 2017, on Page A21 of the New York edition with the headline: The Uncertainty Strategy.

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The Republicans' Uncertainty Strategy - New York Times