Senators Say They Have Bipartisan Deal To Save Obamacare Subsidies
Republican Lamar Alexander and Democratic Senator Patty Murray say they've reached a bipartisan deal to fix an important part of the Affordable Care Act.
Republican Senator Lamar Alexander and Democratic Senator Patty Murray say they have come up with a bipartisan deal that would provide funding for subsidies under the Affordable Care Act that President Trump cut off via Executive Order last week:
WASHINGTON — Two leading senators have reached a bipartisan deal to provide funding for critical subsidies to health insurers that President Trump said last week that he would cut off, Senator Lamar Alexander, Republican of Tennessee, said Tuesday.
The plan agreed to by Mr. Alexander and Senator Patty Murray of Washington, a Democrat, is intended to stabilize health insurance markets under the Affordable Care Act.
As one part of the deal, the subsidies would be funded for two years, a step that would provide at least short-term certainty to insurers. The subsidies, known as cost-sharing reductions, lower out-of-pocket costs for low-income consumers.4
Mr. Trump said he was aware of the deal, describing the effort as very close to a “short term” solution.
“The solution will be about a year or two years. And it will get us over this intermediate hump,” Mr. Trump said Tuesday during a news conference in the Rose Garden.
“It is a short term solution,” he said, adding that the long term solution is to issue “block grants” to states to help people buy private insurance.
Mr. Alexander said that in addition to funding the payments to insurers, the deal would also give states “more flexibility in the variety of choices they can give to consumers,” which should appeal to Republican lawmakers eager to give states more say over health care.
“This takes care of the next two years,” Mr. Alexander said. “After that, we can have a full-fledged debate on where we go long-term on health care.”
Sens. Lamar Alexander and Patty Murray say they have reached an agreement on a bipartisan Obamacare deal to fund a key insurance subsidy program and provide states flexibility to skirt some requirements of the health care law.
There is no assurance that the agreement will get to the Senate floor, however. Republicans on Tuesday were lukewarm about the prospect of resuming debate over whether to try to prop up Obamacare after multiple failed GOP attempts to repeal the law.
The deal would include funding through 2019 for Obamacare’s cost-sharing program, which President Donald Trump cut last week. It would allow states to use existing Obamacare waivers to approve insurance plans with “comparable affordability” to Obamacare plans, Alexander said. But it would notably not allow states to duck the law’s minimum requirements for what a health insurance plan must cover.
“Sen. Murray and I have an agreement,” Alexander said. “We’re going to round up co-sponsors as best we can.”
Alexander said he and Murray would then hand the legislative language off to Senate Majority Leader Mitch McConnell and Minority Leader Chuck Schumer to determine how and whether to bring it to the Senate floor. The chamber has a full legislative calendar for the next few weeks, including a defense authorization bill, a GOP budget and tax reform.
Alexander presented an outline of the plan to GOP senators at a closed-door lunch on Tuesday.
It would also allow consumers over age 30 to buy catastrophic health insurance plans — dubbed “copper” plans — as well as $106 million in funding to support Obamacare enrollment, according to Senate aides familiar with the plan. The new funding would be collected from existing insurance user fees and be used to provide states grants to help people enroll in catastrophic plans.
The deal would make it a little easier for states to get Obamacare waivers, called 1332s. Instead of only being allowed to approve insurance plans that are “as affordable as” existing Obamacare coverage, they could approve plans with “comparable” affordability.
The agreement would also make procedural changes to the way states apply for the waivers in an attempt to speed up the approval process.
At a Democratic lunch meeting, Murray described the agreement as a deal “in principle” and Democrats seemed “receptive” to the broad contours of what Murray and Alexander had reached, according to Sen. Chris Murphy of Connecticut.
“The devil is certainly in the details when you start talking about flexibility and copper plans,” Murphy said.
“We think it’s a good solution and it got broad support when Patty and I talked about it with the caucus,” Schumer told reporters. “We’ve achieved stability if this agreement becomes law.”
The outline “is something I think will attract a good number of votes for people who want to see a near-term solution that ensures stability in the markets and enables and sets up a debate down the road— maybe it’s Graham-Cassidy or something else that is a more comprehensive solution to repealing and replacing Obamacare,” Sen. John Thune (R-S.D.) said, alluding to the GOP’s most recent repeal bill.
“I think there’s a good amount of interest right now at least in making sure we maintain stability in the marketplace, give the states more flexibility which my understanding of his legislation is that it does and we’ll see as we have an opportunity to review it where our members come down.”
As Senator Murray says, the devil is in the details and in how the bill is received by Senators and Members of Congress on both sides of the aisle. Additionally, much will depend upon how the Congressional Budget Office scores the bill and what that analysis says about both the impact that the legislation would have on the budget and the deficit and what impact if any, it might have on the number of people covered by insurance over the next two years. At least on paper, it would seem as though the level of insured people would be relatively unchanged or that it might actually result in slightly more people being covered by insurance. This is due to the fact that the bill as outlined would seem not to do anything to impact the provisions of the Affordable Care Act that the reform efforts considered by the House and Senate over the spring and summer sought to undermine, and would not seem to have a negative impact on the expansion of Medicaid expansion in the states that have chosen to take advantage of that provision of the PPACA. Additionally, the bill would fix the problems that would be created if the Executive Order signed by President Trump would create if it went into effect. Under that order, the subsidies for coverage that were previously provided under the PPACA would have been ended, something that would have led to increases in immediate increases in premiums that would have made insurance largely unaffordable for millions of Americans. This bill would purportedly preserve those subsidies at least for the next two years, which would provide at least some degree of certainty in the short term for insurance companies and insured consumers alike.
In addition to the details, the big question going forward will be whether or not the votes exist to get this bill through the House and Senate and to the President’s desk. As we saw with the House and Senate efforts to ‘repeal and replace’ Obamacare, that task is far easier said than done. In the House, the key questions will be what kind of reception this gets from conservatives in the House Republican Caucus, especially the so-called House Freedom Caucus. In theory, at least, a truly bipartisan deal would be likely to pass the House if it has sufficient Democratic support and a plurality of support from the Republican caucus, of course. As we’ve seen in the past, though, the House GOP leadership has been loath to bring legislation to the floor unless they can be sure the bill will pass with a majority of the Republican caucus due to the so-called, and largely non-existent, “Hastert Rule.” If it can’t then Paul Ryan and the rest of the leadership will be faced with the choice of passing a bill that most of their members oppose and passing a bill that at least will push consideration of the health care issue off until after the 2018 midterms, where it could end up being the third rail for Republicans seeking re-election. In the Senate, the bill is likely to face similar questions but may have a more positive future due to the fact that it would likely easily pass the sixty vote threshold needed to invoke cloture, which will be necessary for any future health care bill due to the expiration of the reconciliation period that Republicans were trying to take advantage of earlier this year.
The irony in all of this, of course, is that if this bill does pass then President Trump and Republicans on Capitol Hill will have suceeded in doing the exact opposite of what they set out to do when all of this began. Instead of repealing and replacing the Affordable Care Act, this bill would seem to actually go a substantial way toward fixing some of its underlying problems and will guarantee that it will be the law of the land at least until 2019, and likely much further into the future. There are still many other underlying problems with the law that need to be addressed, of course, but these changes would at least seem to guarantee that premiums and health care costs won’t explode in the short term. How the Republican base reacts to that if it happens will be interesting to watch.