Photographer: Kholood Eid/Bloomberg

GOP Turns to `Small Step' on Obamacare, Works With Democrats

  • Insurer funding, state flexibility to be focus of new bill
  • Senate is holding a series of hearings on the law this month

Almost eight months after President Donald Trump took office and promised to immediately repeal Obamacare, Republican senators are instead developing a small package of changes to help the health law rather than end it.

Senator Lamar Alexander, the Tennessee Republican taking the lead on some of the efforts, said he wants an Obamacare package to include money for insurers to defray low-income Americans’ health costs, as well as flexibility for states to decide how they cover their citizens under the law.

“This hearing is about taking one small step, a small step on a big issue which has been locked in partisan stalemate for seven years,” Alexander said Wednesday at a hearing by the Senate Health, Education, Labor and Pensions committee, of which he is chairman.

The new, more modest plan is a sharp change of direction after Republicans’ efforts to repeal the Affordable Care Act failed earlier this summer. In another shift, GOP and Democratic lawmakers have pledged to work together on the changes and appeared during the hearing to be prepared to iron out any differences.

Alexander said that members of both parties will have to agree to proposals they might not be comfortable with.

“Democrats will have to agree to something -- more flexibility for states -- that some are reluctant to support. And Republicans will have to agree to something -- additional funding through the Affordable Care Act -- that some are reluctant to support,” he said.

Deadline

The Senate just returned from its summer break and is convening a series of hearings on the Affordable Care Act, and Alexander said his hope is to pass a bill by the end of the month.

Separately, a last-ditch GOP effort to move an ACA replacement gained a major boost Wednesday when Senator John McCain, one of three Republican votes against repealing Obamacare in July, told reporters he supports the measure proposed by Republican Senators Lindsey Graham and Bill Cassidy. The repeal proposal, which focuses on doling out Obamacare funding to states to use as they see fit, faces a deadline on Sept. 30, the end of the fiscal year.

Many other pressing matters -- such as debate over tax reform, immigration, and investigations into the Trump administration and the election -- could become obstacles.

‘Long Shot’

“The likelihood, with everything else that is going on, that we are able to transact that by the end of the fiscal year is a long shot,” said Senator John Thune, chairman of the Senate Republican Conference, the number three position in Senate GOP leadership.

McCain later released a statement saying he supports the concept of the Graham-Cassidy proposal but would want to see final legislation and understand its impact on his home state first. He also said any bill should go through regular order, including having committee hearings, which would likely slow down such a bill.

Senator Susan Collins, the Maine Republican who was also one of three GOP votes against repealing Obamacare in July, dooming the effort, called the bipartisan hearings -- which Republicans declined to hold during their repeal effort -- a promising first step.

“They will help us come up with a solution to help further stabilize the markets and correct a few, not all, but a few of the flaws in the ACA,” Collins said Tuesday.

It’s likely, said Collins, that some of those efforts could be combined into a single bill in order to get it through both chambers.

Insurance Commissioners

Five state insurance commissioners at the hearing from Tennessee, Pennsylvania, Alaska, Washington and Oklahoma strongly backed funding payments that go to health insurers to reduce low-income patients’ out-of-pocket medical costs. Known as cost-sharing reduction subsidies, or CSRs, the Trump administration has threatened to stop making the payments.

“The CSR funding issue is the single most critical issue that you can address to help stabilize insurance markets for 2018 and potentially bring down costs,” said Tennessee insurance regulator Julie Mix McPeak, who is also president-elect of the National Association of Insurance Commissioners.

Alexander backed funding the CSR payments through 2018 while the commissioners pushed for funding through 2019 to provide greater certainty for insurers.

As Congress debates changes to the law, health insurers and state regulators are putting the finishing touches on how it will operate and what coverage will cost next year. Insurance companies were required to submit their 2018 premiums to regulators in many states on Sept. 5, though there’s some room for changes if Congress takes action.

McPeak said carriers in her state could reduce rates if Congress decided to fund the cost-sharing reduction payments by about Sept. 20. BlueCross BlueShield of Tennessee and Cigna Corp. told state regulators that 14 percentage points of their overall 21 percent and 42 percent average rate increase, respectively, was due to uncertainty around the payments.

Other Proposals

Some of the insurance commissioners also called for funds to help insurers offset the costs of abnormally high claims, a concept known as reinsurance, and backed more flexibility to obtain waivers for states to come up with innovative ways to cover their citizens under the law.

States have agreed that obtaining a waiver can be cumbersome and commissioners asked senators to help shorten the time regulators take to approve waivers, permit governors to submit letters of support for a waiver proposal instead of requiring state legislatures to pass legislation, and help ease some of the burden that requires budget-neutral proposals. 

The Senate Finance Committee has jurisdiction over the waivers and, given the fast pace of the bipartisan measure, Alexander said after the hearing he’s staying in close touch with the panel.

Democrats have been wary that increasing flexibility around the waivers may allow states to erode consumer protections under Obamacare. But many of the issues commissioners raised were procedural rather than substantive.

Alexander wasn’t supportive of adding reinsurance funds to the bipartisan bill he hopes to pass by the end of the month, saying the idea may be more appropriate for a longer-term package he hopes the Senate will work on next.

The insurance commissioners also called for action on pharmaceutical costs. Trump has promised to bring down “astronomical” drug prices though hasn’t taken any major action.

“We need to have a serious national conversation about how we can moderate the unsustainable growth in health care costs, especially in areas experiencing astronomical growth in cost like we currently see with pharmaceutical costs,” Teresa Miller, acting secretary of Pennsylvania’s Department of Health and Human Services and former insurance commissioner for the state, said in prepared remarks.

— With assistance by Erik Wasson

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