Reduced for the time being to pruning Obamacare, Sen. Lamar Alexander announced 11 Republican cosponsors Thursday afternoon to a health insurer subsidy bill the president may or may not like, conservatives detest, Senate Democrats embrace, and the House speaker has all but dismissed.
The legislation would reimburse insurers for limiting the costs of certain low-income consumers in the individual market, an arrangement that existed from the Obama administration until Trump officials stopped making the payments, which a federal judge found in 2016 to be unconstitutional without congressional appropriation.. In exchange for funding the subsidies, congressional Republicans sought additional waiver authority and flexibility under the health care law for states—a tradeoff that could be only minor, given that the bill needs 60 votes for passage and, therefore, some Democratic support.
The Democrats’ concessions allow any individual, not just the young, to purchase catastrophic coverage in the Obamacare marketplace, provide states some leeway in how they use federal health care dollars, and expedite the waiver process.
“Some say that’s not enough,” Alexander said of the proposal’s critics. “Well, it’s more than we’ve gotten in eight years.”
It’s a telling admission for the GOP, which, despite its majority status, has legislated from a position somewhere between weakness and ineptitude. The party failed to advance increasingly diluted versions of Obamacare repeal throughout the year, concluding when Majority Leader Mitch McConnell declined to call up a package from Sens. Bill Cassidy and Lindsey Graham late last month. President Trump has touted the basics of that idea this week—repackaging Obamacare funds into a lump-sum, few-strings-attached block grant to the states—and has predicted it would see new life before Congress sometime in 2018.
But the so-called “stabilization” effort for the individual market, made urgent by the president’s decision to cut off the insurer payments, is up first. Trump has called the subsidies a “gravy train” despite flirting with acquiescence to the plan to reinstate them, which is backed by Alexander and Democrat Patty Murray. The pair form the leadership of the Senate Health, Education, Labor, and Pensions Committee.
Alexander said the president told him he was concerned about insurers profiting from the payments, which would amount to a “bailout.” The Tennessee Republican said he agreed “100 percent, [and] so does Sen. Murray.” Their legislation includes language requiring states to certify that insurers will use the subsidies to provide a “direct financial benefit” to consumers and the federal government, perhaps through rebates. As it is, the payments to insurers are de facto “pass-through” funds, which issuers use to recoup the cost of covering an additional portion of their enrollees’ health expenses.
If that’s all gobbledygook, the concern is this: The subsidies ought to eliminate the need for insurers to raise premiums to make up for reducing the out-of-pocket costs of their customers. In theory, they could receive the payments and still charge higher premiums.
“Insurance companies are extremely good at making money, extremely talented at making money,” Trump said on Wednesday. “And I want them to be careful with that.” If the Alexander-Murray bill provides a safeguard he finds sufficient, the president said he’d be “open” to it.
Many Republicans in both houses of Congress, however, are not. “I think [Alexander] is trying to do a good thing, but it’s only temporary, and it leads us down a primrose path that we don’t want to go,” Senate finance chairman Orrin Hatch told the New York Times. Rand Paul, one of the upper chamber’s staunchest Obamacare critics, long has been against what he calls the insurance “bailout.” And House speaker Paul Ryan doesn’t sound keen on the deal.
“The speaker does not see anything that changes his view that the Senate should keep its focus on repeal and replace of Obamacare,” an aide said on Wednesday.
Counting Alexander and Murray, the legislation has 24 total sponsors and cosponsors, half Republicans and half Democrats. Minority Leader Chuck Schumer said Thursday that it is “virtually certain” the measure would pass if it were brought to the floor. There are 48 Senate Democrats; adding them to the 12 Republican backers of the bill gets the vote to 60.
But saying the legislation’s fate is in McConnell’s hands is only a half-truth—even if he brought it to the floor and it passed, its prospects in the House look doubtful.
