Now that Obamacare repeal is dead for the foreseeable future, the pressing question facing Congress is whether they will act to help stabilize Obamacare or let it fall into chaos.
The individual insurance markets are facing rising premiums and major uncertainty as the Trump administration refuses to make a long-term commitment to funding market subsidies. President Donald Trump has repeatedly called to “let Obamacare fail” if it can’t be repealed.
Republicans and Democrats in the Senate were close to finalizing a deal to stabilize the markets early last week. But Republicans abruptly abandoned the talks in the rush to pass a bill to repeal large swaths of Obamacare outright, after some senators — and House Speaker Paul Ryan — announced they would not support a bipartisan bill.
That left senators with the choice between the repeal bill, authored by Sens. Lindsey Graham and Bill Cassidy, and leaving Obamacare in place — until that, too, fell apart on Tuesday.
But now that Obamacare is not going away anytime soon, the focus is shifting back to a short-term deal. Graham had vowed last week he would refuse to vote for any bill that “props up Obamacare.” But on Tuesday he showed far more openness to a bipartisan fix.
“I’m a practical guy. I want to find a way to transition from a failing Obamacare system to something new,” he told reporters. “Let’s find some temporary solutions until we can go for [Graham-Cassidy].”
Last week’s deal, which was being hammered out by Health Committee chairman Lamar Alexander and ranking Democrat Patty Murray, guarantees stabilization funding, taking the decision out of Trump’s hands, at least temporarily. It also gives states significant new freedoms to move away from the structures of Obamacare.
According to a source with knowledge of the negotiations, the deal would:
— Continue Obamacare subsidies known as cost-sharing reductions (or CSRs), for at least another year. The White House is currently paying out the CSRs on a month-to-month basis but has made no commitment that they will stay in place next year. Guaranteeing this funding would prevent an average 20% spike in premiums next year on the standard Obamacare “silver” plans, according to the Congressional Budget Office.
— Open the door to cheaper plans to be sold to people under the age of 30 on the individual markets, who would receive subsidies. This was a major priority for Republicans, who argue that silver plans are too expensive and unnecessary for some (particularly healthy and young) people. Cheaper, “bronze” plans offer catastrophic coverage but would mean much higher out-of-pocket costs for most medical care.
— Faster waivers from Obamacare rules. Currently, every state must go through the full approval process, which can take months or years, for every waiver they apply for to gain exemptions from Obamacare rules. The deal would create a “menu” option for states to pick from waivers that have already been studied and approved, rather than having to start a new application for each waiver from scratch.
— $500,000 in new money for Obamacare enrollment outreach plus additional funding to set up state reinsurance programs (essentially a way for states to insure the insurance companies and bring down premiums).
— Let states change the costs of certain procedures so as to steer people to treatments that have been proven to be more effective.
Alexander, who called off the talks last week after saying it was clear that there was not enough support for such a bill to pass Congress, seemed open to resuming negotiations in a statement Tuesday. Alexander he would “consult with Senator Murray and with other senators, both Republicans and Democrats, to see if senators can find a consensus on a limited bipartisan plan.”
Many Republican senators will likely vote against any bill they see as preserving Obamacare, and Ryan told senators last week he would refuse to put such a bill forward in the House for a vote.
But a bipartisan bill could potentially pass the Senate on the strength of Democrats and moderate Republicans. Maine Sen. Susan Collins, one of the key no votes on Graham-Cassidy, said she believes the Alexander-Murray deal shows great promise in stabilizing the markets and lowering premiums.
“We also ought to focus on the underlying problem of escalating health care costs, which has received very little attention or debate,” she said.
Meanwhile, Republicans insist their fight for repeal is not over. Though the Senate’s budget reconciliation process — the special process that allows a bill to be passed through the Senate with 50 votes instead of the usual 60 — expires Saturday, the process can be used in the future.
The party has already designated the next reconciliation to a tax reform bill. In theory they could put tax reform and Obamacare repeal in the same bill, but several senators said Tuesday that would likely be biting off more than they can chew.
“I think that’s really hard to do. It confuses those issues. I know there’s been some discussion about that, I’d say it’s unlikely,” said South Dakota Sen. John Thune, a member of Senate leadership.
Graham said his plan is to try for repeal again after tax reform. This would give Republicans up to two years to study the issue and craft legislation.
“Patience is a virtue. Time is actually on our side,” said Graham. “The votes we were lacking were actually more about process than substance. We can fix the process and we can improve the substance, so that’s why I’m optimistic.”
That timeline comes with its own problems, however. The party would have to either move up their reconciliation bill to just before the 2018 midterms or attempt it after the election, when they could lose seats in the Senate or the House.