House lawmakers advanced legislation to shield Obamacare customers from having to pay the law’s penalty for not having insurance if their taxpayer-funded insurer collapses.
The bill, advanced to the House floor by the Ways and Means Committee Thursday, focuses on enrollees who have plans under a consumer oriented and operated plan, known as co-ops. Sixteen of the 23 plans created to provide competition on Obamacare’s exchanges have shut down, stirring anger from Republican lawmakers over the loss of $1.2 billion in startup funds.
Democrats shot back at the bill, saying it was unnecessary as the law already provides hardship exemptions for people who unexpectedly lose coverage.
“We have no evidence to even guess how common this scenario may actually be,” said Rep. Jim McDermott, D-Wash., at the markup hearing.
The legislation would provide an exemption for an individual who lost coverage due to a co-op shutting down.
For instance, if a person lost coverage last month, he will not have to pay the individual mandate penalty for not having insurance for the remainder of the calendar year. However, the consumer would have to buy a new plan for 2017.
McDermott blasted Republicans, laying blame on them for the co-op collapses.
“In 2013, Congress slashed funding for loans and grants to co-ops by nearly two-thirds,” he said. “This devastated the program during its early days and denied consumers’ access to consumer choices in the marketplace.
“If they cared, they wouldn’t have destroyed the co-ops when they were born in the crib,” McDermott added.
His comments infuriated Republicans.
“My head’s about to explode,” said Rep. Pat Tiberi, R-Ohio. “My constituents have a tremendous amount of anxiety because they lost their healthcare coverage.”
Tiberi said the problem wasn’t hypothetical, as some Democrats suggested in their comments. Tiberi’s home state saw its Obamacare co-op collapse earlier this year because of more than $1 billion in financial losses.
Other co-ops have decided to hold on until the end of the year, giving customers time to pick another plan. That is what Community Health Options, a co-op based in Maine, decided to do this month after it pulled out of New Hampshire.
