After Denouncing Obamacare ‘Bailouts,’ Will GOP Have To Bail Out Insurers?

Sen. Orrin Hatch, R-Utah, speaks about health care at the Capitol in Washington, Wednesday, Feb. 2, 2011. A Republican drive to repeal the year-old health care law ended in party-line defeat in the Senate on Wednesda... Sen. Orrin Hatch, R-Utah, speaks about health care at the Capitol in Washington, Wednesday, Feb. 2, 2011. A Republican drive to repeal the year-old health care law ended in party-line defeat in the Senate on Wednesday, leaving the Supreme Court to render a final, unpredictable verdict on an issue steeped in political and constitutional controversy. (AP Photo/Jacquelyn Martin) MORE LESS
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Additional reporting by Lauren Fox

Congressional Republicans didn’t want to help insurers when the health care market was transitioning into Obamacare. Now they’ll have to decide how much they’ll be willing to help insurers as they plan the country’s transition out of the Affordable Care Act, which GOP leaders say will be repealed as soon as they convene a new Congress.

With the GOP planning to repeal Obamacare with a two- or three-year delay so they can work on a replacement, a key question is what kind of life rafts they can throw to insurers, who will have no incentive to stay in the ACA individual exchanges carriers know are doomed. Among the proposals insurers are asking Congress to consider are the very programs that Republicans spent six years railing against—and in some cases obstructing legislatively—as “taxpayer funded bailouts.”

So far, lawmakers are playing coy on exactly what is on the table, but at least some key figures in the GOP effort are willing to acknowledge that they may have to back programs during the post-repeal transition that they’ve opposed in the past.

Sen. Lamar Alexander (R-TN), the chair of the Health, Education, Labor, and Pensions Committee, said Republicans were afraid that consumers would have no choices in the transition period if “we don’t take some of these unusual steps.”

“We may have to agree to do somethings for a two- to three-year period that we normally wouldn’t do in the long-term to make sure we give people the relief,” Alexander (R-TN) told TPM Wednesday, though he had previously said “let’s just see” when asked if that included any taxpayer funded programs.

When the ACA was passed it included programs — some temporary, some permanent — designed to mitigate some of the risk that insurers faced as they entered an environment where it would be hard to predict what the markets would like under ACA’s reforms.

Though in concept they aren’t so different from health care policies, like high-risk pools the GOP has supported in the past, Republicans were quick to politicize the programs under President Obama.

“Some Republicans latched on to risk stabilizing programs as bailouts for insurers,” said Larry Levitt, vice president at the Kaiser Family Foundation. “The context was many insurers were losing money because more sick people than anticipated signed up and so Republicans have tried to frame these risk stabilization measures as bailing out insurers that were unprofitable under the ACA, and in the sense bailing out the ACA.”

Sen. Marco Rubio (R-FL), for instance, made his signature cause attacking the ACA’s temporary risk corridors program, which shifted funds from plans that pay out less than expected in claims to plans that pay out more than expected. Republicans slipped language into a must-pass 2014 funding bill that blocked the government from using Health and Human Services funding to make up the shortfall in the program. Now ironically, this and other ACA risk programs could help ease a transition that health care policy experts warn will cause major disruption no matter which alternative Republicans eventually settle on.

“This environment creates a lot of uncertainty for insurers, so the programs that Republicans called bailouts before may be useful in this chaotic period,” Levitt said.

Republicans are currently waffling on whether they would consider this or other similar risk stabilization programs in their transition. And they aren’t even sure if they would consider them “bailouts” if they were included in their unwinding of the law.

Senate Majority Whip John Cornyn (R-TX) said “no bailouts” when asked if Republicans were considering the so-called bailouts they’ve opposed in the past, but added that they were talking to “insurance carriers and others to try to make sure that nobody falls through the cracks during the transition.”

A reporter followed up if he considered a risk corridors program that lasted only through a transition a bailout.

“I’m not going to judge a specific … I just don’t know enough about what you’re asking me to be able to say,” he said.

Sen. John Thune (R-SD), who holds the third-ranking position in GOP leadership, pointed to “steps” Trump’s administration could take “to ensure stability” when asked what Republicans were considering to keep insurers from fleeing the market. He said that “it remains to be seen” when asked if taxpayer-funded measures opposed by the GOP in the past were among their options.

Asked what kind of federal assistance was going to be provided to insurers, Sen. Roy Blunt (R-MO) said that it was “too early to talk about what that’s going to look like.”

“I’m in lots of discussions on this,” he said, while noting that he chairs the appropriations subcommittee overseeing the funding for the HHS. “But I think we’ve got to get step 1 [of repeal] done before we begin to try to figure out step 2.”

The idea of federally supported risk stabilizers for insurers could face resistance from more conservative members who oppose any government intervention in the health care insurance market. Sen. Mike Rounds (R-SD) said that generally it’s not “our role to protect the insurers” but later added that how they keep insurers in the market during the transition is “going to be part of the discussions.”

“I have heard no discussions on risk corridors,” he said when TPM asked him about that specific program.

Some Republicans, however, are signaling that they’d be open to programs they’ve deemed unacceptable in the past.

“I think I would support anything that would keep the market alive as long as we can so that we can really hopefully change it and make it better,” Senate Finance Committee Chair Orrin Hatch (R-UT) said, when asked about a potential risk corridors-like program. “We can’t just let people go without health care. It’s just that simple. On the other hand, there’s a lot of unrealistic expectations in this thing too.”

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