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Bad news for people who like bipartisan health care deals: The plan to stabilize Obamacare put together by Sens. Lamar Alexander (R-TN) and Patty Murray (D-WA) now has an explicitly partisan competitor.
It's going to make it that much harder to reach any deal on helping the law's markets, a task that already promised to be difficult.
This new plan from Sen. Orrin Hatch (R-UT) and Rep. Kevin Brady (R-TX), who chair the powerful Senate Finance and House Ways and Means committees, would:
- Fund Obamacare’s cost-sharing reduction payments in 2018 and 2019, with anti-abortion restrictions
- Provide relief from the law’s individual mandate from 2017 to 2021
- Provide relief from the employer mandate from 2015 to 2017, partially retroactively
- Expand health savings accounts
“Relief” from the mandates isn’t defined — legislative text is coming — but it presumably means individuals and businesses would not have to pay the law’s financial penalties for not having health insurance in those years.
The only thing that Hatch-Brady shares with Alexander-Murray is funding the cost-sharing reduction payments to insurers, which compensate them for offering mandated discounts on out-of-pocket costs to their lower-income customers. Alexander clung to that shared feature in his comments on the new proposal.
“It is encouraging to see a growing consensus that Congress should fund the cost-sharing reduction payments for two more years," he said.
But otherwise, Hatch-Brady adds explicitly partisan objectives that Democrats will likely reject: the cuts to the Obamacare mandates and the introduction of anti-abortion restrictions to the CSR payments.
Alexander and Murray had crafted a careful and delicate compromise: CSR payments in exchange for state flexibility under Obamacare’s 1332 waiver program. They had gotten 12 Republican co-sponsors and 12 Democratic co-sponsors. If all 48 Democrats backed the plan, they already had 60 votes in the Senate.
Hatch and Brady have now introduced two of the most divisive issues in health policy — the individual mandate and abortion — to the Obamacare stabilization talks. Their plan is more akin to a slightly skinnier version of “skinny repeal" from the summer than an Obamacare stabilization package that both parties would likely support.
Murray quickly batted down the Hatch-Brady plan, implying it was a nonstarter for Democrats.
“We already know that partisan proposals to take coverage away from millions of people, spike premiums, and inject even more uncertainty into health care markets cannot pass the Senate,” she said in a statement.
Within the health insurance industry, the new proposal was viewed as a deliberate attempt to undercut Alexander-Murray, which Hatch expressed doubts about before.
“This is why we can’t have anything, let alone nice things,” one insurance lobbyist said.
Alexander-Murray faced plenty of hurdles already, not least of which was deep skepticism from House GOP leaders and the White House. Its best bet was to be folded into the December talks about a government funding bill if Democrats made it a must-have for their votes, which are necessary to pass a spending bill.
But now it will have to compete in those negotiations with Hatch-Brady, adding more partisan acrimony to the mix and muddying the future for any affirmative steps to stabilize the individual insurance markets.
"I would put it in the torpedo category, but I don't really think they had to torpedo anything, as Alexander-Murray wasn't headed anywhere at this time," a second lobbyist told me.
President Trump, for his part, didn't appear to provide any clarity on health care during his meeting with Senate Republicans. Several GOP senators said that the president thanked Alexander for his work, but gave no indication about what kind of bill he would be willing to sign. White House legislative director Marc Short said the White House's demands for a stabilization bill were not discussed at the meeting.
The White House had previously portrayed relief from the Obamacare mandates as a condition for supporting any stabilization bill, as the Wall Street Journal reported, which would appear to align Trump with Hatch and Brady.
So the path forward for even a modest health care deal, already fraught, becomes even more complicated.
Chart of the Day
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The crazy way Trump's CSR move could give people better deals on insurance. There is a bizarre side effect of the president's decision to end the CSR payments: States and health plans can work around it to, in some cases, give consumers better prices on better plans.
The New York Times's Margot Sanger-Katz explained it well in a recent piece. Now this new analysis from Kaiser Health News puts some math behind it. Consumers actually taking advantage of these deals will depend on effective outreach and education — two things Trump is cutting — but the opportunity will be there.
Kliff’s Notes
With research help from Caitlin Davis
Today's top news
- “House Conservatives Say Bipartisan Obamacare Fix Is Dead On Arrival”: “As a popular bipartisan bill to stabilize Obamacare’s individual insurance market stalls in the Senate, far-right members of the House told reporters Tuesday that it would be dead on arrival if it ever made it to the lower chamber.” —Alice Ollstein, Talking Points Memo
- “Federal Judge Skeptical Of Claims That Dropping Subsidies Hurts Consumers”: “A federal judge Monday expressed skepticism that President Donald Trump’s decision to halt certain health law insurance subsidies would cause consumers immediate harm, as California and many other states claim in a lawsuit.” —Ngoc Nguyen, California Healthline
- “Administration Denies More States' Plans to Customize Insurance Markets”: “Two states looking for approval to customize their health insurance systems under the Affordable Care Act reversed course after the Trump Administration said their applications couldn't be approved in time for next year. Iowa withdrew its proposal to the Centers for Medicare and Medicaid Services for a waiver to alter their Affordable Care Act markets. Massachusetts' proposal was effectively denied by the administration.” —Alison Kodjak, NPR
Analysis and longer reads
- “How Iowa Became An Obamacare Horror Story”: “Iowa’s marketplace is arguably in the worst shape in the country at a time when Republicans are intent on dismantling Obamacare, creating further stress on the wobbly exchanges. And Trump’s decision to gut funding for outreach and marketing activities ahead of open enrollment is likely to have an outsize effect in a state in which many customers are certain to be confused by their options.” —Paul Demko, Politico
- “The ‘Uber for birth control’ expands in conservative states, opening a new front in war over contraception”: “The consensus of the majority of health experts is that emergency contraceptives are safe, and that their mechanism of action is in fact different from the abortion pill. That divide is now coming to the fore, as activists in some conservative states are pressing lawmakers to more tightly regulate emergency contraception prescribed by app.” —Max Blau, STAT
- “Oscar is getting into Medicare Advantage”: “Oscar Health Insurance is planning to keep branching out beyond the Affordable Care Act's individual markets. The startup insurance company has a job posting for an actuary who 'will support the launch of our Medicare Advantage business.'” —Bob Herman, Axios
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