Deal to shore up Obamacare faces big hurdles, including Trump
(Bloomberg)—Senators may have struck a bipartisan deal to prop up Obamacare’s insurance exchanges, but it faces a tortuous path to becoming law.
As soon as the deal was announced Tuesday, the Trump administration was sending conflicting signals about the pact reached by Republican Senator Lamar Alexander of Tennessee and Democrat Patty Murray of Washington. Their agreement also faces ambivalence from some Republican senators and outright hostility from many House Republicans.
Coming days after a decision by President Donald Trump to scrap subsidy payments to Obamacare insurers, the deal is likely the only Obamacare legislation with a chance of passing Congress this year. It could help stem a flight by major insurers out of the individual insurance market in many states, with Americans due to begin signing up for 2018 coverage in two weeks.
But even though a number of Republicans are eager to prevent a collapse of the individual health insurance market, it would likely take a strong push by Trump to get it passed in both chambers.
Trump has appeared to try to straddle the divide in his party on Obamacare, both encouraging Alexander to reach a deal with Murray and reveling in dismantling the Affordable Care Act. Alexander said Trump pushed him in phone calls last week to reach a short-term deal to stabilize the Obamacare exchanges. But the president also gloated on October 14 after shares of health insurers fell following his order to end payments to help cover the cost of policies for low-income consumers.
Trump acknowledged Tuesday that he had encouraged Alexander to reach a deal with Murray, but said he wanted to ultimately see states given blocks of money and be allowed to set up their own programs.
“The solution will be for about a year or two years; it’ll get us over this intermediate hump,” Trump told reporters. But within an hour of his remarks, White House budget director Mick Mulvaney said, “The president wasn’t interested in signing the original version of Alexander-Murray.” He added, “It could be packaged with some type of larger deal.”
Marc Short, the White House legislative director, Tuesday said the White House wants bigger concessions, including doing away with the part of the law requiring everyone to have insurance, either through their own policy or their employer.
Later, speaking at the Heritage Foundation’s annual President’s Club meeting, Trump added: "While I commend the bipartisan work done by Senators Alexander and Murray, I continue to believe Congress must find a solution to the Obamacare mess instead of providing bailouts to insurance companies.”
Alexander late Tuesday sought to assuage Republicans who may be wary of taking the limited action on a health program they campaigned to end altogether. On the Senate floor, he said the plan should be seen as an incremental move that can be followed later with other actions.
“Once we complete this limited first step, we can take a second and a third step. I want to undersell this proposal instead of oversell it,” he said on the Senate floor. “It has significant advantages. But it is only a limited first step.”
The two-year deal would allow crucial subsidies to health insurers to start flowing again, potentially lowering insurance premiums for those in the program next year.
The package would give states new flexibility on how their Affordable Care Act markets are run. It will also encourage states to meld their markets together, and let more people buy low-cost, limited-coverage plans.
The flexibility would allow states to implement Obamacare in a way that provides customers coverage similar in affordability to plans under the current law. At the same time, states can’t degrade consumer protections Obamacare requires plans to offer, such as maternity care, mental health services and a ban on discrimination against pre-existing conditions, Murray said on the Senate floor.
The agreement also restores some of the money the Trump administration slashed for outreach regarding open enrollment in Obamacare plans.
“We compromised on the outreach funding and have agreed we will spend about twice as much or more than President Trump wanted to spend, but we will do most of that in grants to the states,” Alexander said.
The administration had cut advertising spending by 90 percent down to $10 million for the sign-up period starting at the beginning of November. It also reduced payments by 39 percent to groups that help people choose among their health insurance options.
Perhaps the chief obstacle to the deal being enacted is the wariness of some key Republicans to embrace it.
Resistance to the proposal is already building in the House. Representative Mark Walker, who heads the conservative Republican Study Committee, said that GOP lawmakers should be focused on repealing Obamacare, not propping it up.
“This bailout is unacceptable,” the North Carolina lawmaker said in a tweet from the group’s account.
But other conservatives sounded more open to the deal, including House Freedom Caucus chairman Mark Meadows of North Carolina, who praised Alexander and Murray and said the deal “is a good start and a welcome expansion from earlier discussions.”
In the Senate, Republican leaders still are recovering from the July collapse of their drive to replace Obamacare. Alexander told reporters this week that the leadership team was focused now on a tax overhaul and not on his efforts to stabilize the exchanges.
McConnell didn’t commit to putting the compromise plan on the Senate floor after a closed-door meeting Tuesday of all Republicans in the chamber, where Alexander summarized the accord.
Senate Minority Leader Chuck Schumer said the Alexander-Murray package got “broad support” during Senate Democrats’ weekly lunch at the Capitol. “We think it’s a good solution,” he said. “I think there’s a consensus that we need short-term stability.”
The health insurance subsidies, called cost-sharing reduction payments or CSRs, have been a major factor in the increased premiums plans say they’ll charge next year. The subsidies help lower-income people with co-pays and other costs they face when they see a doctor or pick up a prescription.
A federal court ruled the CSR payments improper because of how the 2010 law was written, and the matter is currently before an appeals court. The Trump administration announced last week that it was cutting them off, leaving health insurers and hospitals wondering what would happen for the rest of this year and for 2018.
Funding the cost-sharing subsidies would spare insurers more than $1 billion in financial losses this year, and could let them lower premiums for 2018. But with rates already set for 2018, it’s not clear whether insurers and state regulators would be able to bring premiums down immediately.
As Republicans examine the emerging deal, at least one Senate Republican leader sounded optimistic.
Senator John Thune of South Dakota, the No. 3 Republican leader, said he sees potential for a “short-term bridge” similar to what Alexander and Murray are proposing. Republicans could do that and then later seek deeper changes to Obamacare, he said.
Thune said if a final stabilization measure gets broad support, it could be attached to another piece of legislation this fall or be considered on its own. The most likely candidate is the year-end spending bill needed to keep the government open after December 8.
GOP Senator John McCain of Arizona, whose thumbs-down vote doomed an Obamacare replacement in July, praised Alexander and Murray’s "good faith, bipartisan negotiations" in a statement and said he looks forward to voting for the bill.