A handful of governors urged U.S. senators on Thursday to help Obamacare customers by injecting billions of dollars in federal funding into the market, but were divided over the longevity of such support and how much authority states should have in crafting their own healthcare plans.
They stressed from the outset of a Health, Education, Labor and Pensions Committee hearing that they believed it was necessary for Congress to appropriate cost-sharing reduction subsidies, which are mired in a legal battle and currently being paid each month by the Trump administration. Without them, premiums would rise by roughly 20 percent more for next year in addition to already expected increases, according to the Congressional Budget Office.
Senators are using testimony from governors to help them come up with a bipartisan healthcare bill to stabilize the Obamacare exchanges, which are facing the prospect of few options for customers and higher prices for unsubsidized customers. The Senate HELP Committee is holding hearings this week and next to arrive at solutions, but it still remains unclear whether they will be able to arrive at an agreement.
Utah Gov. Gary Herbert, a Republican, said he wasn't a fan of the CSR payments but that insurers needed predictability. Montana Gov. Steve Bullock, a Democrat, called for three years of funding for the subsidies, even though HELP Committee Chairman Sen. Lamar Alexander, R-Tenn., has called for one year and Democrats who are willing to appropriate the funds have called for two.
Additional divisions emerged over whether governors felt Obamacare created too many restrictions for states, and whether a stabilization package should address them.
A proposal that has been pushed by Republican Sens. Lindsey Graham of South Carolina, Bill Cassidy of Louisiana, and Dean Heller of Nevada would take roughly $500 billion in revenue from Obamacare and hand it to states to craft their own plans. While some Republicans have suggested it may be a vehicle for seeking again to undo portions of Obamacare, Cassidy raised it during the hearing Thursday to gauge how governors felt about it.
Massachusetts Gov. Charlie Baker, a centrist Republican, said he would not support such a proposal, saying that it would hurt Medicaid and cut money from states.
He did, however, say that he would like states to have more flexibility when it came to benefits that health insurance companies are required to provide in their plans.
"We support essential health benefits, but it's a challenge to stay within strict federal standards," he said.He also supported allowing states to come up with their own ways for nudging people to get health insurance, including through letting states decide whether to enact an auto-enrollment plan that would place people into catastrophic plans paid for through tax credits.
Herbert noted his state of Utah was different from Massachusetts and had younger residents, and urged senators to allow states to lead on healthcare.
"Give us that opportunity and we will solve much more efficiently and effectively," he said.Congress has a short timeline to approve a package, and even so it's unclear to what extent the changes would help Obamacare's customers.
Alexander has stressed the need to focus on a bill that would have narrow provisions, and said during Thursday's hearing that it was unlikely the committee would look to repeal the health insurance tax, because they had limited time to make up the revenue elsewhere. Suspending or repealing the provision has been a major lobbying effort for insurers or small businesses, who say that it could reduce premiums by as much as five percent.
"There's no way we come up with $145 billion in 10 days," he said.
Governors also said they supported reinsurance coming from the federal government, at least initially. Through a reinsurance program, health insurance companies can pay for the highest-cost claims. Tennessee Gov. Bill Haslam, a Republican, said he thought the program should be funded by the federal government this year and that states should take it up in coming years. Around $15 billion was proposed during another Obamacare hearing Wednesday, a higher figure than has been injected in past years.
But Alexander raised the question about whether states should create their own reinsurance program as Alaska and Minnesota have done, and offer states more flexibility by altering Obamacare requirements so such programs can be approved faster. Most states, however, would not be in a position to immediately finance a reinsurance program in time for the Sept. 27 deadline insurers have with states, pointed out Sen. Susan Collins, R-Maine.