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White House Withdraws Support for Bipartisan Plan to Stabilize ACA

by Precise Leads

October 23, 2017

Is the latest version of healthcare reform likely to fail without presidential support?

Just a day after cautiously backing it, President Donald Trump withdrew his support for a bipartisan effort to temporarily shore up the Affordable Care Act. He mainly objected to its continuation of cost-sharing reduction subsidies (CSR), which he characterized as a bailout for insurance companies.

Before he distanced himself from the tentative deal brokered by Sens. Lamar Alexander (R-TN) and Patty Murray (D-WA), President Trump ordered an immediate halt to CSR payments, which the federal government provides to insurers so that they can reduce deductibles and copays for low-income ACA enrollees. The Alexander/Murray proposal also included a provision to fund $106 million in outreach efforts designed to boost ACA enrollment, as well as a measure giving states the power to construct their own health insurance plans.

Healthcare Reform Remains Stalled

After several failed attempts in the Senate to repeal and replace the ACA, the latest effort by Alexander and Murray faces an uphill battle. A spokesperson for House Speaker Paul Ryan told Axios that “the Speaker does not see anything that changes his view that the Senate should keep its focus on repeal and replace of Obamacare”, while Senate Majority Leader Mitch McConnell has yet to schedule a vote on it, according to the Washington Post.

While Democrats would likely favor the bipartisan bill, some Republican senators may not, which would leave the bill short of the 60 votes required for passage. “As it stands right now, without the president supporting it, I don't think you have the votes in the House or the Senate to do it," Sen. John Thune (R-SD) told NBC News.

Sen. Alexander told NBC News the president may favor legislation that requires insurers to use the CSR payments to reduce premiums rather than increase their profits. The president himself has recently championed cross-state insurance sales and expressed an interest in allowing interstate organizations to buy multi-state plans.

What About Premiums?

Since President Trump had previously said he would end the CSR payments, many insurers participating on the state ACA exchanges had calculated premiums for 2018 without the subsidies. A report from the Kaiser Family Foundation anticipated a 19% rate hike for mid-tier silver plans if CSR payments were to end.

In some states, insurers submitted two sets of premium requests — one with subsidies and another without the payments — by the deadline in late September. In some states, insurers were required to submit only one rate estimate based on receiving the CSRs. A representative of the Centers for Medicare and Medicaid Services told the Washington Post that the agency is working with insurers in those states to refile requests taking into account the loss of the subsidies.

What to Tell Your Clients

The still simmering debate over healthcare reform and the fate of the CSR payments comes just weeks before the ACA open enrollment period begins on November 1. Now that the White House has stopped the CSR payments, premiums will likely be higher than many enrollees expected. A preliminary survey of 21 major cities from the Kaiser Family Foundation released in the summer found rate requests ranged from a 5% drop in in Providence, Rhode Island to a 49% hike in Wilmington, Delaware.

Insurance agents whose clients purchase health insurance from the ACA exchanges should monitor updated rate filings in their state so that they can help clients choose an affordable plan that covers all their medical needs.

 

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