Congress needs to reach a deal to fund payments to Obamacare insurers by the end of September if lawmakers want to avoid even heftier price increases for customers, experts say.
The deadline illustrates the major task Congress faces as it tries to reach a bipartisan deal to fund cost sharing reduction payments, known as CSRs, to reimburse insurers for reducing out-of-pocket costs for low-income Obamacare enrollees next year. If negotiations spill into October, it may be too late to reduce premiums for enrollees next year, some experts say. The White House has not said if it intends to make the payments.
Uncertainty in Obamacare's marketplaces has been a constant theme as insurers prepare for 2018. Congress has grappled with legislation to repeal and replace the law for much of the year, but those efforts are on hold after a narrow defeat in the Senate.
Now lawmakers are turning their attention to shoring up the individual market, which includes Obamacare's exchanges and is used by people who don't have insurance through their employer.
Congress can make an appropriation for the payments if President Trump decides not to fund them. Bipartisan work is expected to start when lawmakers return after Labor Day from their August recess.
"Legislative action in September would generate significant benefits with respect to premiums and insurer participation," said Matt Fiedler, a fellow with the Brookings Institution think tank.
Insurers are scheduled to sign final contracts with the Centers for Medicare and Medicaid Services for Obamacare plans and rates by Sept. 27. Residents in 39 states and the District of Columbia use healthcare.gov to buy Obamacare plans, with the remaining states running their own exchanges.
Federal and state officials "likely have some ability to adjust those dates if circumstances warrant," Fiedler said. "Indeed, some regulators have already signaled their intent to provide some flexibility on timing."
Independent expert and Obamacare supporter Charles Gaba estimates that premiums in 40 states would rise nearly 28 percent without the CSRs next year or if enforcement of the law's individual mandate is weakened. The average increase with the CSRs and enforcement of the mandate would be nearly 14 percent.
But another expert questions if it would be too late to strike a deal by September.
"[Insurers] may not have an opportunity to go back and revise their premiums since we are coming very close to the time they have to lock in those rates," said Cynthia Cox, associate director of health reform for the nonpartisan Kaiser Family Foundation. "Insurers may not have much time to go back and revise their premiums, but it may keep them from dropping out of the market."
She added that questions over cost-sharing payments aren't the only factor leading to uncertainty.
"To some extent, the political and policy uncertainty is already showing through with the individual mandate possibly being weakened or not enforced," she said.
Trump signed an executive order soon after he was inaugurated in January that directed federal agencies to ease the economic burdens of Obamacare. That included providing greater latitude in exempting people from paying the individual mandate penalty for not having insurance.
People can receive an exemption from paying the penalty if they don't make enough money.
There are also logistical problems with making changes so late in the game, making the need to pass funding by the end of September critical. Obamacare's open enrollment is set to start on Nov. 1.
"Adjusting rates, getting contracts signed, and getting plan information loaded into healthcare.gov takes time," Fiedler said. "I think that can all be achieved in the course of a month, but less than a month would get increasingly challenging."
Congress faces several pressing deadlines beyond healthcare. Congress must find a way to raise the debt ceiling and fund the government by the end of September, but funding for CSRs could be a part of that spending deal.
Congress also has to reauthorize the Children's Health Insurance Program, another must-pass vehicle that could be used to include changes to the individual market.
Potential obstacles could make reaching a quick deal difficult. Some Republicans have said they want to make changes to Obamacare in return for the CSR funding.
It is not clear if Democrats are open to that. Some have said they want to extend the payments longer than the one-year fix some Republicans have proposed.
A further element of uncertainty is the legal fight over the CSRs that is in limbo.
The House sued the Obama administration in 2014 arguing the CSRs were illegal because they were not appropriated through Congress. A federal judge sided with the House but delayed her ruling until after the 2016 election. The Obama administration appealed the decision.
Trump has not decided what he wants to do about the lawsuit. He has the power to end the payments at any time or could drop the appeal and let Congress make the payments.