Deal reached to restore ACA reduction payments
(CNN) — Sens. Lamar Alexander and Patty Murray have reached a deal “in principle” to restore Affordable Care Act cost-sharing reduction payments for two years in exchange for more state flexibility in Obamacare.
One Senate aide said the plan would also restore just over $100 million in funding for Obamacare outreach, which is particularly critical since the Trump administration has slashed support for 2018 open enrollment, which begins on November 1.
An Alexander aide told CNN that Republicans would get a provision they wanted, a major change in how states measure the affordability of insurance under their waiver requests. This would allow states a lot more flexibility, but that final language was still being ironed out.
The deal would make it easier for states to obtain waivers to customize Obamacare rules to their needs. States have complained that applying for waivers is a long and complicated process. Alaska and Minnesota, for instance, have received permission to use federal funds for reinsurance programs that reduce premiums. This agreement would speed administration approval of the waivers and allow states to copy provisions in waivers that were already approved.
However, it does not actually loosen any of Obamacare’s regulations, which had been a key goal of the Republican effort to repeal the health reform law.
The agreement would also allow all Obamacare enrollees to sign up for so-called catastrophic plans, which have lower premiums but have higher deductibles. Right now, these so-called copper policies are only open to those under 30.
There are no guarantees that Republican leadership would bring such a plan to the floor without significant support from rank-and-file members. Getting a sizable number of co-sponsors will be key to the Murray and Alexander’s success. That work has yet to begin.
After the deal’s announcement, Republican Study Committee Chairman Mark Walker tweeted, “The GOP should focus on repealing & replacing Obamacare, not trying to save it. This bailout is unacceptable.”
President Donald Trump, when asked about the deal, called it a “short-term solution” but appeared supportive of the proposal.
“We have been involved, and this is a short-term deal because we think ultimately block grants going to the states is going to be the answer,” Trump said in the Rose Garden.
His comments were consistent with how Alexander described Trump’s position over the weekend. During a phone call Saturday, Trump told Alexander that he supported the effort to reach a bipartisan deal on the CSR payments.
“Lamar has been working very, very hard with … his colleagues on the other side, and, Patty Murray is one of them in particular, and they’re coming up, and they’re fairly close to a short-term solution,” Trump continued Tuesday. “The solution will be for about a year or two years, and it will get us over this intermediate hump.”
On Tuesday night, Trump repeated his praise for the efforts from his Republican colleagues but also pushed for Congress to do more.
“While I commend the bipartisan work done by Sens. Alexander and Murray, and I do commend it, I continue to believe Congress must find a solution to the Obamacare mess instead of providing bailouts to insurance companies,” Trump said addressing the Heritage Foundation in Washington.
Alexander, a Republican from Tennessee, and Murray, a Democrat from Washington, have worked for weeks on the plan, but their work became even more urgent last Thursday after Trump announced abruptly that he would cease making cost-sharing reduction subsidy payments. Now, however, the real work begins in convincing members of their respective parties to back any deal they have reached together.
Democrats and Republicans were each briefed on the deal during lunch Tuesday.
How much of an impact the deal has on 2018 premiums, however, remains in question. While experts said the bipartisan agreement will bring more stability to Obamacare overall, it may be too late to affect the premiums for 2018. Open enrollment begins in two weeks, which doesn’t leave states and insurers much time to revise the rates on the federal exchange, healthcare.gov, or the state exchanges.
“It doesn’t seem logistically possible at this point for insurers to revise their premiums following legislation and start open enrollment on time,” said Larry Levitt, senior vice president at the non-partisan Kaiser Family Foundation. “There may be ways to ensure that consumers get rebates.”
Trump’s yanking of the funding for the subsidies — which reduce deductibles and co-payments for low-income Obamacare enrollees — did not have a widespread impact since many insurers already raised their rates in anticipation of the move. Regulators in several states that didn’t price in the funding loss announced rate hikes soon after the president’s announcement last week. Insurers must continue to offer the cost-sharing subsidies since they are required by law.
Trump has long used the cost-sharing subsidy funding as a bargaining chip in his quest to repeal Obamacare. He threatened to end the payments in the spring to bring the Democrats to the bargaining table and then in the summer to lash out against the Senate’s failure to pass a repeal and replace bill. His decision last week to actually end the funding put added pressure on Congress to come to a bipartisan deal.
The cost-sharing subsidy funding was at the center of a court battle between the House and the Trump administration, which inherited the lawsuit from the Obama administration. In the suit, House GOP lawmakers have argued that they never appropriated funds for the payments. A district court judge agreed last year and ruled that the subsidies were illegal, but Obama officials appealed. The House and the Trump administration has yet to come to a resolution.
This story has been updated and will continue to update with additional developments.