Senators on the health committee are working over the weekend to try to reach an agreement on a stabilization bill for Obamacare that they hope will temper insurer exits and premium increases expected for customers who will buy coverage on the exchanges.
The negotiations follow four hearings during the last two weeks in which senators from both parties on the Health, Education, Labor and Pensions Committee heard from governors, health insurance commissioners, health policy experts and insurers. Republican Sen. Lamar Alexander, HELP Committee chairman, and Sen. Patty Murray of Washington, the committee’s top-ranking Democrat, are expected to release a bill early next week.
The legislation would need to be signed by President Trump before Sept. 27, the deadline for most states to finalize contracts with insurers unless the administration changes it.
Alexander and Murray expressed optimism about their ability to arrive at a deal, even as Senate leaders have not guaranteed it would receive a vote. Further complicating an agreement are other healthcare bills in Congress. Four Republicans are trying to push through a last-ditch Obamacare repeal measure, while 17 Senate Democrats are sponsoring a socialized medicine bill, called the Medicare for All Act, introduced by Sen. Bernie Sanders, I-Vt.
“It’s going to be a tough needle to thread for both sides,” a senior GOP aide told the Washington Examiner. “We got a clear indicator on actually how interested many Democrats are in a bipartisan solution for healthcare when 17 of them introduced single payer this week.”
Like many Republicans, Democrats have not indicated whether they would sign on to a stabilization package, and many of them have laid the stability of the exchanges at the feet of Trump, who has not said whether he would fund cost-sharing reduction subsidies, a part of Obamacare they have said he must pay.
The funds were initially provided to insurers by the Obama administration, and a federal judge ruled they were not constitutional. Trump has threatened to cut them off and a Congressional Budget Office score said gross premiums would rise by about 20 percent if he were to do so.
As a way to mitigate those effects and take the president’s role out of the equation, the HELP committee is considering appropriating the funds. The length of time for such an appropriation, whether one or multiple years, is an area the committee is debating.
But such an appropriation will not come without a compromise, said Alexander, who made it known during the final hearing Thursday that in exchange he was seeking a stabilization bill with more flexibility for states.
The flexibility would come in the form of an Obamacare provision that allows states to file for waivers to alter their healthcare systems, called 1332 or “innovation waivers.” Alexander told reporters he not only wanted a bill that would expedite their approval by the administration but one that would allow states to have more flexibility about what type of coverage they require from insurers.
Democrats have said that they are concerned such a change would chip away at Obamacare’s protections for people with pre-existing illnesses and would exclude certain types of medical coverage from plans, such as mental health coverage or maternity care.
“Democrats will reject any effort to use this discussion as a way to erode the guardrails and protections that so many patients and families rely on,” Murray said during one of the hearings.
Alexander also has suggested the idea of offering a “copper” plan alongside the current platinum, gold, silver, and bronze plans. The copper plans would have higher deductibles and offer fewer benefits than more expensive options but would attract individuals into the market who have fewer medical needs.
It’s not clear how much of an effect the stabilization bill will have in time for consumers to feel the effects on their 2018 plans. Insurers in some states are planning double-digit rate increases even if they receive cost-sharing funds.
Largely because of those premium increases, roughly 2 million more people are expected to be uninsured in 2018, CBO projections show. Insurers fled the Obamacare exchanges as they waited to hear from the federal government about what would happen to the law. Pullouts have been going back to 2016, under former President Barack Obama, as insurers incurred massive losses from selling the plans, a trend that has largely continued.
Other stabilization ideas that had been requested by insurers were quickly dismissed during the hearings. For instance, Alexander said that it was unlikely the committee would look to repeal the health insurance tax, because lawmakers had limited time to make up the revenue elsewhere. Suspending or repealing the provision has been a major lobbying effort for insurers and small businesses, who say that it could reduce premiums by as much as 5 percent.
“There’s no way we come up with $145 billion in 10 days,” he said.
Several governors at one of the hearings also had asked senators for a reinsurance program of roughly $15 billion, which would lower premiums, in particular, for people who don’t receive subsidies. While several Democrats voiced support for the proposal, Alexander pointed out several times during the hearings that some states had implemented their own reinsurance programs, which other states could emulate through the waiver process.
Most states, however, have said the timeline for them to create similar plans would be too tight and that they would be unable to put up initial funding.
If Alexander and Murray are able to reach an agreement, it would mark a seven-year shift from Republican efforts to repeal and replace portions of Obamacare.
But even that effort hasn’t stopped completely. A bill sponsored by Sens. Bill Cassidy of Louisiana, Lindsey Graham of South Carolina, Ron Johnson of Wisconsin and Dean Heller of Nevada would route Obama’s revenues to states in the form of block grants and repeal some parts of the law. But the legislation faces a tight timeline and may not have the support it needs to pass.
As for Alexander and Cassidy, they have said they hope the bipartisan bill will pass either way.
“We don’t compete with what he is doing,” Cassidy said Friday about Alexander’s plan. “We complement but we don’t compete. In fact, I think it’ll be more likely to get cost-sharing reductions passed if we pass this.”
