When Sen. Susan Collins cast her vote supporting the tax-reform package, which effectively repealed Obamacare’s individual mandate, she did so with a pledge from leadership that measures to stabilize the market would be passed by the end of the year.
Senate Majority Leader Mitch McConnell in late 2017 provided backing for the pieces of legislation after Collins expressed concern about repealing the mandate without measures to temper the premium increases.
December slipped by along with three continuing resolutions—each without the bills that would provide cost-sharing-reduction payments and reinsurance funding. But the senator from Maine is insisting the deal she struck with Republican leaders will still be fulfilled with a larger spending bill this year that is sure to carry many of Congress’ priorities.
“I have always said that the policy was more important than the deadline and that the plan was to put it on the omnibus,” she told National Journal, adding that she is having good discussions with House members and they seem particularly open to the reinsurance proposal.
But House Republicans may not be too eager to jump onboard with bills that provide support for a system they dislike. “A lot depends on what goes with it,” said Rep. Tom Cole, chair of the appropriations subcommittee that oversees Health and Human Services Department funding. “It’s going to be hard to get a lot of Republicans to vote yes to sustain Obamacare if there’s not some concession.”
In order to get House Republicans to go along with this plan, Molly Reynolds, fellow in governance studies at the Brookings Institution, said the measures would have to be part of legislation that was already going to lose Republican votes anyway.
“Depending on how the spending deal and the immigration piece shake out, we might end up with that sort of piece of legislation as the omnibus, in which case I could imagine possibly these Obamacare-stabilization measures making it into that omnibus,” said Reynolds, referring to the fight over policy that allowed people who entered the country illegally as minors to remain.
Experts also cast doubt on the effects of the measure on the individual market, particularly legislation cosponsored by Sens. Lamar Alexander and Patty Murray. The bill would restore the cost-sharing-reduction payments which go to insurers that cover low-income consumers’ out-of-pocket expenses.
Murray conceded that the legislation would have to be revisited since the landscape of the health care system has shifted. But she is still working to get the bill passed, she said.
“I am deeply concerned that the actions that this Republican Congress and the president have taken have severely undermined the ability for people to have quality, affordable health care,” she said.
But providing the payments now could turn out to be more disruptive than helpful. “It seems that the time for Alexander-Murray has largely passed,” said Larry Levitt, senior vice president for health reform at the Kaiser Family Foundation in an email to National Journal. “States and insurers responded to the termination of cost-sharing-subsidy payments by raising premiums in a way that largely held consumers harmless, and in fact helped some people by boosting their premium subsidies. Restoring the cost-sharing-subsidy payments wouldn’t help many consumers and would actually hurt some, and it wouldn’t do anything to stabilize the market.”
The boosted premiums have encouraged some healthy people to enroll in the marketplace, said Aviva Aron-Dine, senior fellow at the Center on Budget and Policy Priorities.
“There is an argument that Alexander-Murray is less attractive in a post-mandate world where it’s even more important to have really robust subsidies that are bringing a range of risk mixes at lower incomes into the individual market,” she said.
The second measure championed by Collins and Sen. Bill Nelson would provide funding for high-risk pools or reinsurance programs, and experts said this could be more helpful in lowering premiums for consumers.
“Federal funding for reinsurance could reduce premiums for people not eligible for subsidies and help to offset the effect of repealing the individual mandate,” said Levitt.
But the benefits could still be limited. Aron-Dine said that reinsurance helps pick up the higher-risk population, but won’t necessarily address the issue of the entire risk pool getting smaller and sicker.
“What reinsurance is doing is it’s taking on some of the upper tail risk of the most expensive people, but the big uncertainty created by the executive actions and the individual mandate is how many healthy people will now leave,” she said.
Neither bill, however, would make up for the damage of repealing the mandate, she said.
The American Academy of Actuaries warned Congress in December that eliminating the penalty would increase uncertainty and instability when it came to future enrollment, premium rates, and risk-pool profiles. “Insurers would likely reconsider their future participation in the market,” the group wrote. “This could lead to severe market disruption and loss of coverage among individual market enrollees.”
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