A congressional committee is holding bipartisan meetings in September to help stabilize the Obamacare exchanges, which are facing higher gross premiums and fewer choices for customers heading into 2018.
The meetings will be held by the Senate Health, Education, Labor, and Pensions Committee, whose leaders have pledged to work to arrive at a bipartisan solution. Still, the timing is limited and politics between the two parties are raw following Republicans’ failure to repeal and replace Obamacare in July. It remains unclear whether Congress will reach an agreement on how to stabilize the exchanges, or if what they decide will make a significant dent in the price of premiums or the choices customers face. Lawmakers must finalize a plan by Sept. 29, when final contracts between insurers and states are signed.
Here are the policy proposals likely to be discussed:
Cost-sharing reduction subsidies: Health insurance companies have said they need to know whether they can expect to receive these funds so they know how much to charge for coverage. The funds help insurers offer lower out-of-pocket costs to poorer customers, but they are mired in a legal and political battle. Tennessee Republican Sen. Lamar Alexander, HELP committee chairman, said he believes the funds should be appropriated, but some Republicans describe them as a “bailout” for insurance companies.
A Congressional Budget Office report projected that, without the funds, gross premiums would rise by an average of 20 percent for 2018, a hike that would hit middle-class customers who don’t get federal money to help pay for their plans.
The funds were paid under the Obama administration, and challenged in court by House Republicans, who said they needed to be appropriated through Congress. A judge sided with Republicans, but the case is on appeal and funds continued to go out. Now, they are now being paid out by the Trump administration month by month.
Congress could appropriate the money, expected to reach $10 billion in 2018. Democrats, however, aren’t necessarily going to be willing to vote in favor of appropriating the funds, and have alluded to how doing so may come across as a tacit acknowledgement the Obama administration illegally distributed the funds.
“In theory there is no need for Congress to do anything [on CSRs],” said a senior Democratic House aide, speaking to a group of reporters. “But if needed, we can provide a technical fix. … I think if we were in charge, we would say, ‘We’re cool here.'” How long to appropriate the funds, whether through 2018 or longer, is likely to be at the center of debate.
Suspending taxes: The medical device and health insurance tax were suspended this year as part of a spending bill, and industry groups hope to have the same outcome apply for 2018. Health insurers and small businesses have said suspending the health insurance tax would reduce premiums for customers by between 3 and 5 percent, and the medical device industry has planned to increase pressure on members of Congress, arguing the tax will stifle innovation and job creation. Outside conservative groups have pressured Republican members of Congress to repeal the taxes.
State flexibility: Republicans have said they want states to have more flexibility when it comes to carrying out Obamacare or the choices state lawmakers make about insurance provisions. One way to do that is through the 1332 waivers under the law, known as “innovation waivers.”
These are approved individually by the Department of Health and Human Services, though they have specific guidelines states must meet before they can be considered. By “flexibility,” Republicans could either be referring to Obamacare’s mandates, such as those requiring coverage for a specific list of medical services, or to changes to the process for having a waiver approved.
Reinsurance: The program injects federal funding into the system, so medical costs for sicker enrollees are covered without significantly raising the cost of premiums for those who use less medical care. Reinsurance programs were implemented nationwide under Obamacare, with $10 billion paid out in 2014, $6 billion in 2015, and $4 billion in 2016. The program was intended to provide stability as the exchanges were starting and was never meant to be permanent. Now, some lawmakers, including governors, would like to bring it back.
