Democrats see opening for Obamacare fix7 September 2017 | 04:45 | Washington Examiner
Several Senate Democrats said they were heartened that most insurance regulators at a hearing Wednesday called for Congress to create a new federal reinsurance program, which would pay Obamacare insurers that enroll sicker, more expensive people. That unified industry stance makes Democrats optimistic about passing something, even though Republicans are wary of adding reinsurance to a narrow deal to stabilize Obamacare's exchanges.
"We are in the ballpark for a deal, which is news in and of itself," said Sen. Chris Murphy, D-Conn., who sits on the Senate Health, Education, Labor and Pensions Committee that held the hearing.
He noted that the disagreement appears to be over who should be in charge of the reinsurance program, not whether such a program should exist. Committee Chairman Sen. Lamar Alexander, R-Tenn., floated the idea that states could apply for their own separate reinsurance programs, just like Alaska did for the 2018 Obamacare coverage year.
But insurance regulators said at the hearing that a federal program is needed to help get things started. A major problem is getting money from a state legislature for something that would likely bring down Obamacare rates.
Some states "cannot get the funds from the legislature for that first year to show there is an impact ... that would bring down the rates," said Lori Wing-Heier, Alaska's insurance commissioner.
A reinsurance program could, in theory, save the federal government money by keeping overall premiums down. Lower premiums mean the federal government has to pay out fewer dollars in tax credits to lower the cost of insurance.
Obamacare had a reinsurance program for the first three years of the marketplaces, but it expired starting this coverage year.
Murphy was in favor of a federal approach at the hearing, while Alexander said he wants to speed up the federal waiver process that lets a state create its own reinsurance program. Insurance regulators said at the hearing that the six-month time frame to get a waiver approved by the federal government is too long, and Murphy said a single federal program would be more efficient.
"I think it makes much more sense to do reinsurance once rather than 50 times," Murphy told reporters.
There is also a dispute among Democrats and Republicans over how long a stabilization package should last. Alexander said he wants a package that funds insurer subsidies for one year that lower out-of-pocket costs for low-income Obamacare customers and gives states more flexibility to run their Obamacare exchanges on the individual market, which is used by people that don't have insurance through a job.
Democrats are hoping for a longer package that lasts beyond 2018.
"I think the important elements are that the cost-sharing subsidies aren't gonna go away for at least two years," Sen. Tom Carper, D-Del., told the Washington Examiner.
He authored a bill with Sen. Tim Kaine, D-Va. that sets up a reinsurance program.
Carper said he was pleased that most of the witnesses in the committee hearing and a separate hearing in the Senate Homeland Security and Governmental Affairs Committee espoused the need for reinsurance.
Sen. Ron Johnson, R-Wis., chairman of the homeland security committee, said he was open to some type of reinsurance. He offered up examples of Wisconsin's high-risk pool where the state subsidizes care for the sickest people on the individual market.
"I am happy to take a look at different models," he said.
But approving a federal reinsurance program could open up Republicans to attacks from conservative groups.
Some outside groups like Heritage Action have labeled reinsurance and cost-sharing reductions as "bailouts" of Obamacare, and have urged Congress to continue efforts to repeal the law.
"The Senate's inability to produce 51 votes for a piece of legislation that delivers on a seven-year campaign promise to repeal and replace Obamacare is not license for a bipartisan bailout of a failing law," said Heritage Action President Mike Needham last month.
Alexander said Wednesday he hopes the committee could get together a stabilization deal by the end of next week in order for the Senate to pass it by the end of the month. He noted after the hearing that timing could be an issue since Obamacare insurers are quickly finalizing their rates for 2018.
He said there is a "general consensus" to do cost-sharing payments and additional state flexibility.
"If we can do two things that would be two more things than we have agreed on in a bipartisan way in the last seven years on health insurance," Alexander told reporters after the hearing, referring to the length of Obamacare. "We have been able to do it in every other healthcare area."
Alexander's committee holds the second of four hearings on Thursday on the individual market. The hearing is expected to feature state governors.
Murphy remains optimistic the Senate can reach a deal even though there are disputes over the length of a stabilization package and how to do reinsurance.
"Given the disputes we have had on healthcare over the course of the last 8 months that is a relatively small one," he said, recounting the partisan acrimony over Obamacare repeal.
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