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Collins-Nelson, the health care key that could unlock the tax bill, explained

Republicans are promising extra money for the health markets, but experts say it won’t be enough.

Senator Susan Collins Mark Wilson/Getty Images

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Senate Republicans could vote to repeal Obamacare's individual mandate in a matter of hours.

And they might do it with votes from Sen. Susan Collins (R-ME) and Lisa Murkowski (R-AK), the two stalwarts who voted against every version of Obamacare repeal earlier this year.

Republicans must appease Collins by agreeing to pass two Obamacare stabilization bills that President Trump has already said he supports but experts warn won't actually do enough to mitigate the mandate's repeal.

First there's Alexander-Murray, the stabilization measure that has been under discussion for months. I already reviewed why that bill would not actually offset the damage of repealing the mandate, which would lead to an estimated 13 million fewer people with insurance and higher premiums.

The second bill is Collins-Nelson, a plan co-sponsored by the Maine senator and Sen. Bill Nelson (D-FL). Republican senators have said that both of these bills could be passed in an end-of-year spending plan.

Collins-Nelson would provide $4.5 billion in federal reinsurance funding over 2018 and 2019 to help lower insurance premiums by compensating insurers for their costliest patients.

The thinking, from Collins's point of view, is this money would help mitigate the 10 percent increase in premiums that CBO projects if the tax bill passes, because healthy people would drop out of the market without the mandate.

So would it?

I asked friend of VoxCare Larry Levitt at the Kasier Family Foundation. His answer was: Collins-Nelson might partially help lower premiums after the mandate is repealed. But it probably wouldn't fully offset the premium hike, and it wouldn't prevent the ranks of the uninsured from growing.

"This is not happening," one Senate Democratic aide told me Thursday.

It is a matter, as always, of math. Based on the current Obamacare enrollment, about $10 billion would be needed to offset a 10 percent rise in premiums. States would chip in money under Collins-Nelson, meaning the ultimate infusion into the insurance market would be more than $4.5 billion, but it probably wouldn't be enough to meet that target.

"The Collins-Nelson bill would help mitigate premium increases resulting from repeal of the individual mandate, but it would fall short of completely offsetting the hikes," Levitt said.

It also wouldn't prevent people from leaving the insurance market, increasing the ranks of the uninsured, he said. Now, that may be more of a philosophical choice for Collins and Murkowski. Both have said that they do see the logic in removing a mandate for people to purchase insurance.

But the result would still likely be fewer Americans with financial protection if they have a sudden catastrophic accident or diagnosis and higher premiums for those still buying insurance — just slightly less higher, thanks to the Collins-Nelson infusion of federal funding.

One person close to the insurance industry colorfully said, with the mandate repealed and Alexander-Murray and Collins-Nelson becoming law, "they could stabilize things at the current unacceptable levels."

"Without the individual mandate this thing just keeps limping along about as it has been," this person told me. "I keep saying this is really becoming Zombiecare! It could go on for years as it looks now."

Lastly, there is the question of whether Alexander-Murray or Collins-Nelson would even become law. President Trump could still change his mind; he's blanched at stabilizing Obamacare before. And Republicans in the House aren't keen on propping up the law either.

Democrats are already warning that Collins is buying into a false promise to justify her tax vote. (She is also hedging her vote on other issues besides health care, it should be noted, but health care is clearly at the top of her mind.)

Later on Thursday, Collins still sounded mostly satisfied with the commitment she’d received from Trump and leadership about the Obamacare stabilization bills getting a vote.

“I have a commitment from the president that he will help with the House. I’m still optimistic that we’ll get the agreement that I need,” she told reporters. “But I’m keeping my powder dry until we see.”

Chart of the Day

Avalere

Narrow networks! It's been a while since we talked about narrow networks, the limited provider options that many health insurers have decided to offer on their Obamacare plans. But this new research from Avalere shows the market has continued to trend in that direction, likely in an attempt to keep costs down but restricting options for consumers.

Kliff’s Notes

With research help from Caitlin Davis

Today's top news

  • “CBO: Insurance Market Stabilization Impact Null If Mandate Repealed”: “Legislation from the duo at the helm of the Senate health panel would do little to improve the number of uninsured individuals if the mandate created by the 2010 health law is repealed, according to the Congressional Budget Office. A repeal of the mandate — which requires individuals to purchase insurance or pay a yearly fine — is currently included in the GOP bill to overhaul the U.S. tax code.” —Joe Williams, Roll Call
  • “Governors implore Congress to renew children's health funding”: “The National Governors Association is urging Congress to fund critical health-care programs — including the Children’s Health Insurance Program and community health centers — before the year ends.” —Rachel Roubein, The Hill
  • “CVS Health Closes In on Deal to Buy Aetna”: “CVS Health Corp. is moving closer to a deal to buy Aetna Inc. for more than $66 billion in cash and stock. The deal, which could be announced by Monday, would create a health-care-industry behemoth selling everything from drugs to insurance.” —Dana Mattioli and Anna Wilde Mathews, Wall Street Journal

Analysis and longer reads

  • “Epidemic Of Health Care Waste: From $1,877 Ear Piercing To ICU Overuse”: “Experts estimate the U.S. health care system wastes $765 billion annually — about a quarter of all the money that is spent. Of that, an estimated $210 billion goes to unnecessary or needlessly expensive care, according to a 2012 report by the National Academy of Medicine. ProPublica has been documenting the ways waste is baked into the system.” —Marshall Allen, ProPublica
  • “Express Scripts CEO Open to Insurer Deal, Ties With Amazon”: “Express Scripts Holding Co.’s chief executive said he’s open to a deal with a health insurer or partnering with Amazon.com Inc. CEO Tim Wentworth’s pharmacy benefits company has been battered by departing clients and the vague specter of Amazon’s entry into the drug business.” —Robert Langreth, Bloomberg
  • “CMS finalizes rule cancelling mandatory bundled payment models”: “In a final rule released Thursday, the Centers for Medicare and Medicaid Services is following through on its proposal to cancel hip fracture and cardiac bundled payment models. CMS has also scaled back the number of geographic areas participating in the comprehensive care for joint replacement model.” —Susan Morse, Healthcare Finance

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