Bipartisan Deal Could Give Temporary Protection to Obamacare

Would cover cost of subsidies to insurers for 2 years, but passage in Congress uncertain

By
HealthDay Reporter

TUESDAY, Oct. 17, 2017 (HealthDay News) -- Are Americans enrolled in Obamacare health plans -- threatened by recent Trump Administration moves -- being thrown a lifeline?

On Tuesday, two prominent Senators -- Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.) -- announced a bipartisan proposal that would fund vital subsidies for insurers participating in Affordable Care Act (ACA) programs.

Last Friday, President Donald Trump said he planned to sign an executive order that would eliminate those subsidies, known as cost-sharing reductions. These subsidies help insurers defray medical costs for low-income Americans enrolled in ACA plans.

However, the Alexander-Murray deal -- if approved by Congress -- would cover the cost of those subsidies for two years, offering short-term assurances to insurers, The New York Times reported.

The move might even have the president's support: Alexander said Trump had encouraged him to work on the deal with Murray, the Times said.

Still, the deal's passage is far from sure, because it would need the support of conservative Republican lawmakers in the House. Many have said they view such a move as a bailout for insurance companies, the Times said.

The latest news continues the roller coaster ride many Obamacare beneficiaries may feel they have been on as political battles over the program continue.

On Friday, Trump signaled that he would issue an executive order killing the subsidies, weakening the ACA.

"The government cannot lawfully make the cost-sharing reduction payments," the White House said in a statement, adding that, "Congress needs to repeal and replace the disastrous Obamacare law and provide real relief to the American people."

Trump's announcement came just hours after he signed an executive order that allows small businesses to band together and buy health insurance that flouts ACA regulations. Experts believe that's another move that could cripple Obamacare, allowing healthier enrollees to flee to cheaper but skimpier plans.

Speaking last week, Trump said the move will promote health care choice and competition.

"You'll get such low prices for such great care," he said just prior to signing the executive order, CBS News reported.

But opponents say the order will undermine coverage offered to millions enrolled in the ACA.

Together, the two moves could be death blows to Obamacare unless a move such as that proposed by Alexander and Murray is approved.

All of this comes after Trump was unsuccessful multiple times in getting the program repealed via Congress.

In a joint statement issued Thursday, the top Democrats in Congress, Senator Chuck Schumer of New York and Representative Nancy Pelosi of California, said Mr. Trump had "apparently decided to punish the American people for his inability to improve our health care system," the Times reported.

"It is a spiteful act of vast, pointless sabotage leveled at working families and the middle class in every corner of America," they said. "Make no mistake about it, Trump will try to blame the Affordable Care Act, but this will fall on his back and he will pay the price for it."

But House Speaker Paul Ryan, Republican of Wisconsin, supported Trump's decision. According to the Times, he said the Obama administration had overridden Congressional authority by paying the subsidies in the first place. "Under our Constitution," Mr. Ryan said, "the power of the purse belongs to Congress, not the executive branch."

Moves to undermine or protect Obamacare come less than three weeks before the Nov. 1 start to the open enrollment sign-up season for the program. It's unclear whether any new rule changes could be ready for implementation within that timeframe, experts said.

Larry Levitt, Kaiser Family Foundation's senior vice president, told the Washington Post that Trump's order to expand health plan options outside of the ACA could do serious damage.

"If there's a lot of hoopla around new options that may be available soon, it could be one more thing that discourages enrollment [in the ACA]," he said.

Trump's directive expands cross-state access to association health plans, which allow small businesses and trade groups to partner up and purchase health insurance. Employers also get wider leeway in using pre-tax dollars to cover workers' health expenses, avoiding rules imposed by the ACA.

Under the new rules, association health plans will also be exempt from certain ACA rules, such as requirements that they cover standard benefits like prescription drug coverage. They also could be subject to limits on annual and lifetime costs, and people with preexisting conditions could be charged more for their coverage.

The Trump administration rule also eliminates restrictions on short-term health insurance plans, which offer limited benefits and are intended as a stopgap between jobs.

Under the Obama administration, such short-term plans could not last more than three months, but Trump plans to extend that duration to nearly a year.

Critics of the White House's latest move against the ACA include state insurance commissioners, health care policy experts, and many within the health insurance industry.

They argue that the order will lead to the creation of a "shadow" health insurance system that competes directly against the ACA marketplaces, offering cheap and limited policies. Healthier Americans will gravitate toward the skimpier coverage offered under these plans, opponents say, leaving sicker people in ACA-governed plans that will become increasingly expensive.

"No one healthy is now going to sign up in the ACA risk pool, because they have this cheaper option," Deep Banerjee, a health care analyst at S&P Global Ratings, told Politico. "It just takes away the opportunity of this risk pool getting better."

But some business groups are cheering the move, saying it will allow them to provide employees with insurance options that are affordable and appealing.

More information

Visit HealthCare.gov for details on how to enroll for health insurance under the Affordable Care Act.

SOURCES: CBS News; Washington Post; Politico; The New York Times

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