Sen. Lamar Alexander, chairman of the Health, Education, Labor and Pensions Committee, said Thursday that appropriating funds to insurers to help ease the cost of Obamacare premiums was a reasonable tradeoff for a bill that would give states flexibility.
"To get a result, Republicans will have to agree to do something, additional funding through the Affordable Care Act, that some are reluctant to support. And Democrats will have to agree to something, more flexibility for states, that some may be reluctant to support," the Tennessee Republican said during his opening statements at a HELP committee meeting to discuss the Obamacare exchanges.
"That's what's called a compromise," he added.
The exchanges, created under Obamacare, allow some people to buy tax-subsidized coverage, but several insurers have abandoned the markets or are planning premium increases in light of uncertainty over what would happen to the healthcare law. They also have said that too few young, healthy people have enrolled in the program, causing them massive losses in the markets, and are asking for more flexibility from the federal government as well as the injection of federal funds.
It's not clear if senators will be able to come to an agreement to mitigate the instability in the market. Republicans would like to see states have more leverage over the type of coverage they require insurers to offer, and they also would like the waiver process under Obamacare, which allows states to change portions of the law, to move faster than it currently does. Democrats are concerned that flexibility could chip away at Obamacare's protections on pre-existing illnesses and on guaranteeing coverage for a specific array of healthcare services, such as mental health and maternity care.
In testimonies in similar hearings, insurers, governors and health insurance commissioners have been split about what flexibility would do for their states, but they have been aligned in insisting on having Congress issue payments to insurers, estimated at roughly $10 billion for 2018. The funds in question, called cost-sharing reduction subsidies, are mired in a legal battle that began during the Obama administration. Insurers say they need to know whether the funds will be provided in 2018 so they know how to price their premiums, which would be roughly 20 percent more expensive without them.
President Trump has threatened to cut off the funding, but Alexander warned that even if Trump were to assure insurers that he would pay them, he might be overruled by a judge. The case has been on appeal, but the federal district court for the District of Columbia previously ruled that the administration didn't have the authority to make the payments, saying they needed to be appropriated through Congress.
Alexander insisted that an action from Congress was necessary on the payments, but warned he would not accept a deal without flexibility for states. The committee is planning to send a bill to Senate leaders next week and have a short timeline, as states must finalize their contracts with insurers by Sept. 27.
"I simply won't be able to persuade the Republican majority in the Senate, the Republican majority in the House and to the Republican president to extend the cost-sharing payments without giving states meaningful flexibility," Alexander said.