Measures to stabilize ACA premiums, fund CHIP delayed to New Year
Two bipartisan measures designed to stabilize insurance premiums for the Affordable Care Act will be left out of a year-end spending bill after Republicans agreed to let debate slip into next month.
A vote on extending a program that provides health insurance to low-income children will also likely slide into 2018, even as several states face a funding squeeze that could leave many families without coverage.
Meanwhile, President Donald Trump commented on the passage of the GOP tax bill to claim that the inclusion of the provision repealing the individual mandate “essentially repealed Obamacare.”
Regarding efforts to stabilize premiums for the ACA, Republican Senators Lamar Alexander of Tennessee and Susan Collins of Maine said in a joint statement that it’s clear Congress will only pass a short-term spending fix and that they plan to wait until early next year for their bills to be considered in a longer-term spending package. The White House has signaled its support for both measures.
The senators said they will offer the bills “after the first of the year when the Senate will consider the omnibus spending bill, the Children’s Health Insurance Program reauthorization, funding for Community Health Centers and other legislation that was to have been enacted this week.”
The bills would fund ACA insurance subsidies known as cost-sharing reduction payments that help offset low-income Americans’ health costs and provide money to help states establish high-risk insurance pools. Collins had sought to have the measures brought up by the end of this year as part of a deal to win her support for the Republican tax overhaul. The senator was worried about the effect on insurance premiums of a provision in the tax bill that repeals the Obamacare requirement that everyone have health insurance.
Alexander and Collins said both measures would blunt the effect on rising premiums.
Collins spoke to House Speaker Paul Ryan on Wednesday morning, and he expressed support for her high-risk pool proposal, possibly with some changes. Vice President Mike Pence told Senate Majority Leader Mitch McConnell on Tuesday while he was in the Capitol that he and the president also are supportive.
Some states are running out of money for the Children’s Health Insurance Program, funding for which lapsed in September, and it’s unclear how they will fare if Congress doesn’t take up a five-year reauthorization until next year. CHIP is a shared federal-state program that covers children of parents who make too much to qualify for Medicaid but not enough to pay for private insurance.
About 2 million of the 9 million children covered through CHIP may lose coverage as soon as January, and another million could lose coverage in February, according to a report from Georgetown University Health Policy Institute.
Meanwhile, Trump claimed victory for “essentially” repealing Obamacare in the Republican tax bill that cleared the House on Wednesday.
The bill eliminates the insurance mandate, which otherwise imposes a tax penalty on Americans who don’t have health insurance; however, other components of the ACA were left intact. Insurers have warned that eliminating the requirement will cause them to raise premiums. Healthy people will have less incentive to sign up for coverage, leaving insurers with a sicker pool of customers overall, the companies and many economists and health policy experts say.
“The individual mandate is being repealed. That means Obamacare is being repealed,” Trump told reporters at the White House on Wednesday. “We have essentially repealed Obamacare.” Trump claimed Republicans will “come up with something that will be much better” to replace the mandate. That’s despite the fact that Republicans failed in multiple attempts to repeal the ACA craft a replacement this past year.
The true importance of the mandate has been debated by economists and policymakers, and the CBO has said it is revising how it calculates the effect. S&P Global Ratings suggested last month that rolling back the penalty would save less than expected, and increase the number of uninsured by only 3 million to 5 million. About 6.5 million people paid an average penalty of $470 for not having insurance in 2015, according to IRS data.
However, repealing the individual mandate won't affect exchange ACA premiums for 2018, since open enrollment has concluded in most states and rates are otherwise set, says Rachel Sokol of the Health Plan Advisory Council of Advisory Board, a consultancy. “Exchange premiums are likely to rise in 2019, as healthier plan members are anticipated to forgo insurance or purchase cheaper products off-exchange, leading to riskier exchange pools comprised of a higher proportion of less-healthy individuals.
“However, individuals who receive premium subsidies—the majority of exchange purchasers—won't be directly affected by premium increases; the government will just pay higher subsidies,” Sokol notes. “Those with incomes above 400 percent of the federal poverty level who do not receive subsidies will bear the full brunt of premium increases.” However, Congress could pass legislation to provide funding for federal reinsurance or cost-sharing reduction payments, which could reduce premium increases to some degree, she adds.