What Democrats Would Give Up on Obamacare

In exchange for GOP agreement on two years of crucial subsidies, Democrats appear willing to allow more flexibility for state waivers.

Sen. Patty Murray, accompanied by Sen. Bernie Sanders and Senate Minority Leader Chuck Schumer, speaks to reporters on Tuesday. Murray and Sen. Lamar Alexander said they had the "basic outlines" of a bipartisan deal to resume payments to health insurers that President Trump has blocked.
AP Photo/Andrew Harnik
Erin Durkin and Alex Rogers
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Erin Durkin and Alex Rogers
Oct. 17, 2017, 6:38 p.m.

Senate Democrats, in an effort to get key Obamacare payments funded and avoid market instability, are poised to allow states to tinker with the idea of “affordable coverage” when innovating in their own marketplaces.

But the changes are still a far cry from the amount of leeway Republicans wanted to provide states in their repeal efforts, and it is unclear how enthusiastic conservative lawmakers are about details of the deal.

Senate Health, Education, Labor, and Pensions Committee Chairman Lamar Alexander and ranking member Patty Murray on Tuesday announced a bipartisan deal to fund key subsidies to insurers under Obamacare for two years while providing states more flexibility in running their marketplaces.

The effort gained momentum in the last few days after President Trump decided to cut off cost-sharing-reduction payments, which go to insurers to reduce the out-of-pocket costs for low-income consumers on the exchanges. Cutting these funds is expected to lead to a hike in premiums, which many insurers have already done, and market instability.

Senate aides from both sides of the aisle detailed the changes: The deal would allow more people to buy catastrophic plans, increase funding for Obamacare outreach, and quicken the approval process for Obamacare waivers that allow states to change certain ACA regulations in their marketplaces. The proposal includes other changes sought by Republicans—expediting reviews for waiver proposals that have already been approved in other states and allowing governors to approve state waiver applications rather than requiring state legislatures to pass a law.

A GOP aide touted one particular reform to the innovation waivers as a “win” for Republicans. The change deals with one of the so-called “guardrails” that requires coverage under an innovation waiver to be “at least as affordable” as coverage under the ACA. The Alexander-Murray proposal would change this requirement to “comparable affordability.”

The GOP aide said this could allow the administration to approve waivers such as Iowa’s controversial proposal. The state’s original proposal would have abolished cost-sharing-reduction payments and premium tax credits and used that funding for a reinsurance program and per-member per-month premium credits.

“It changes the guardrails so that [states] could focus on affordability overall rather than affordability on the lowest-income people,” said health care expert Timothy Jost, emeritus professor at the Washington and Lee University School of Law. He added, however, that it is hard to see the measure racing through the House and Senate to get the Iowa waiver approved in time for the 2018 marketplaces.

A Democratic aide said that Murray added language to protect low-income and vulnerable populations as a “check on the affordability-guardrail changes.”

The outlined changes are still far less than what was included in the Senate Republican repeal package, which would have scrapped most of the guardrails that required insurance under the waivers to cover the same amount of people, be just as affordable, and be just as comprehensive.

A GOP lobbyist predicted that the Alexander-Murray deal could not move by itself because there is not enough in it for Republicans. Instead, the lobbyist said, there may be a pathway for cost-sharing subsidies in an end-of-the-year spending deal.

After Alexander privately briefed his colleagues on Tuesday, the Republican leadership in the Senate did not immediately embrace the compromise, appearing to wait for feedback from Trump and rank-and-file senators before announcing a position on the deal.

“I think now we’re going to have to see where the support is,” Sen. John Cornyn, the No. 2 Republican in the chamber, told National Journal. “If the president supports it, if it’s really what it appears to be—a step in the right direction—then it might be worth considering.”

Alexander told reporters that he is encouraged by the support he has received, including from the president. “This takes care of the next two years. After that, we can have a full-fledged debate on where we go long-term on health care,” he said.

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