The question about what Republicans will do about crucial Obamacare subsidies is whole big mess of derp, but it still threatens to crash the individual health insurance market. Derp has consequences.
In some ways, the conundrum surrounding the subsidies, known as cost-sharing reductions, are a microcosm of the challenges facing Republicans. The years of their anti-Obamacare jihad are coming back to haunt them. Making the whole situation more treacherous is that they’re being led by a President known for throwing around bombastic threats with little concern about their effect. In this case, President Trump has only exacerbated anxiety that he would seek to sabotage the health insurance market in the name of political hard ball.
We’re back to where we were a month ago, with the deadline for insurers to submit their plans fast approaching, but no clear timeline on how long the payments to insurers will continue. Whether insurers can count on receiving the billions in subsidies that benefit seven million people may make or break the individual market this year.
Lawmakers’ latest decision on the payments was a non-decision. Congress left town last week having averted a potential government shutdown over the payments but not really cleaning up the confusion around them. They could have written language into the recently unveiled appropriations bill that would have guaranteed the subsidies’ future existence. Instead lawmakers signaled they would continue trusting the administration to make the payments, having received a meager promise that the subsidies will continue for some unspecified amount of time with no “final decision about future commitments,” according to a White House aide.
Trump over the weekend complained that the payments were just a “bail out,” in tweets that were unlikely to quell insurers’ calls for a clearer signal about their future.
You can’t compare anything to ObamaCare because ObamaCare is dead. Dems want billions to go to Insurance Companies to bail out donors….New
— Donald J. Trump (@realDonaldTrump) April 30, 2017
…healthcare plan is on its way. Will have much lower premiums & deductibles while at the same time taking care of pre-existing conditions!
— Donald J. Trump (@realDonaldTrump) April 30, 2017
Last week, however, GOP lawmakers weren’t very concerned that the White House would waver on its promise to keep them going.
“They haven’t been put in the appropriations bill before, and if the Obama administration saying they were going to do it was good enough, I don’t know why the Trump administration [saying they’re going to do it] wouldn’t be good enough,” Sen. Roy Blunt (R-MO), who oversees Senate appropriations of the Health and Human Services Department, told reporters Thursday
Rep. Tom Cole (R-OK), the House’s HHS appropriator, said Friday he was “sympathetic” to the concerns of the insurers and he believed that payments could continue, at least until an Obamacare replacement plan was in place.
“But they’re not going to get a bunch of Republicans to vote for something that they would consider Obamacare,” Cole added.
“Everybody wants more and more assurance, but you’re not going to get it by getting people who have never supported the current system to somehow guarantee that it’s up to them to keep it going,” he said.
The payments subsidize insurers for keeping out-of-pocket costs, like deductibles and co-pays, low for for consumers making 100-250 percent of the federal poverty line, as mandated by the ACA. They were being paid by the Obama administration via the Treasury Department without controversy until 2014, when House Republicans sued Obama’s HHS in a legal challenge that alleged the payments were illegal since Congress didn’t explicitly appropriate them.
Many legal observers considered the case a longshot, though a federal judge sided with the Republicans in a decision against the payments last year. She allowed the subsidies to continue while the case is appealed. Questions about the subsidies’ future existence loomed larger after Trump took office, and his Justice Department has refused to say whether they’d continue defending the payments in the suit. The Republicans were able to pause the proceedings through May, when both parties will have to update their next moves.
Insurers, along with providers, business groups, and other groups, have made clear that this current state-of-play isn’t good enough for them.
“Clarity and commitment to this funding is needed to eliminate confusion and anxiety for consumers, and to allow health plans to make timely and appropriate decisions about market participation in 2018,” a statement released by America’s Health Insurance Plans, the American Hospital Association, the Chamber of Commerce and other industry and business groups said in response to the latest round of political volleying over the payments.
The CEO of the insurance company Molina, Mario Molina, meanwhile warned that the company would pull out of the exchanges immediately of the payments were halted.
In light of the Trump administration’s ambiguity, the only other solution Republicans can point is the House GOP Obamacare repeal bill, which would allow the payments to continue until 2020.
“I’m looking forward to the House actually passing an overall health care reform bill,” Sen. John Barrasso (R-WY), a member of the Senate GOP’s leadership team, said Thursday evening, when asked by TPM about insurers’ desire for more clarity now.
Hours later House GOP leaders announced that, yet again, they had not found enough votes to move the bill forward.
Even if the House mustered the votes to pass that bill this week, it still faces a rough road ahead in the Senate, where Republicans have signaled they will have to change the bill drastically if it is not allowed to simply just die there. The deadline for insurers to file their plans for next year is just a few weeks away, so any additional assurance about the payments they could get would likely need to come outside of the Republican legislation.