Conservative groups are pressuring Congress to not include two bills intended to stabilize Obamacare’s insurance exchanges in a two-year spending package coming up this month.
A letter from organizations including Heritage Action, Club for Growth, Freedom Partners, FreedomWorks and Americans for Prosperity to members of Congress called the two bills “taxpayer bailouts.”
“Proposed ‘solutions’ to Obamacare’s rising costs, such as providing new federal funding for risk mitigation programs (like ‘reinsurance’ and ‘invisible high-risk pools’) or cost-sharing reduction subsidies are bad ideas,” the letter said.
Sens. Lamar Alexander, R-Tenn., and Patty Murray, D-Wash., proposed a bill that would fund cost-sharing payments to insurers for two years. In exchange, states would receive more latitude to waive Obamacare regulations.
The cost-sharing payments would reimburse insurers for lowering copays and deductibles for low-income Obamacare patients.
Sens. Susan Collins, R-Maine, and Bill Nelson, D-Fla., have a bill that would give states $10 billion to create the risk mitigation programs such as reinsurance, which covers Obamacare insurers’ highest medical claims and would lower premiums overall.
The senators behind the bills are working to include them in the spending bill, which is being hammered out by congressional appropriators. Congress has to pass the package by March 23 to prevent the government from running out of funding.
The contents of the omnibus spending bill will likely be released this week. So the groups are pushing lawmakers to keep the bills out of it.
“Lawmakers should not be fooled by ludicrous claims that spending new federal money on Obamacare bailouts will save the federal government money,” the letter said. “Nor should lawmakers fall for the argument that bailouts are only temporary.”
The letter added that states could get risk mitigation programs such as reinsurance through federal waivers. The federal government approved a waiver for such a program for Alaska, but it did not include any new federal funding.
The Congressional Budget Office has said that Alexander-Murray would save the federal government $3.8 billion over the next decade.
The reason is that without the cost-sharing payments, which Trump terminated last fall, premiums would rise as insurers are required to lower co-pays and deductibles. That means the federal government would pay more in income-based tax credits that lower the cost of insurance. The tax credits rise to match any increase in premiums.
During the 2018 open enrollment, insurers responded to the loss of the cost-sharing payments by raising premiums.
Taxpayers Protection Alliance, Independent Women’s Voice, Competitive Enterprise Institute, Council for Citizens against Government Waste, Concerned Veterans for America, Coalition to Reduce Spending, Generation Opportunity, the LIBRE Initiative, American Commitment and Campaign for Liberty also signed the letter.