With time running out, Sen. Lamar Alexander is pleading with Congress to rally behind his Obamacare-stabilization plan for two simple reasons — it will slash premiums, and it pays for itself.
The Congressional Budget Office estimates that a bipartisan plan to restore insurer payments that President Trump canceled last year, and free up billions of dollars to subsidize super-costly enrollees, would cut consumers’ premiums by 10 percent nationwide next year.
States that win waivers to allow alternative health plans could cut their consumers’ premiums by 20 percent in 2020 and 2021, the CBO said in its preliminary evaluation of Mr. Alexander’s bill.
The Tennessee Republican said it’s critical to do something as part of this week’s must-pass spending bill before insurance companies set their 2019 prices, which could shock consumers this fall.
“They’ll be announced on October 1. About a month before the next election. There are a lot of people who are going to be looking at that,” Mr. Alexander said.
The senator has been pushing for months for some version of the plan he crafted with Sen. Patty Murray, Washington Democrat, that would pay insurers billions of dollars a year in “cost-sharing reductions” (CSRs) to cover poor customers’ out-of-pocket costs.
Mr. Trump last year canceled the payments, saying they’d never been authorized by Congress and accusing the Obama administration of making them illegally.
Insurers raised their rates to make up for the loss of taxpayer money, and that meant taxpayers ended up paying more on the back end because they subsidize the cost for Obamacare exchange customers.
Budget analysts told Mr. Alexander that, according to preliminary estimates, making the cost-sharing payments upfront will save taxpayers $32 billion over the next three years in lower exchange subsidies.
That’s more than enough to cover $30 billion in “reinsurance” payments Mr. Alexander wants to make to blunt the cost of the sickest customers, hoping companies then lower their rates for other customers.
Mr. Alexander is hoping the benefits of his latest plan outweigh ideological objections. All sides want to cut premiums, yet they’ve retreated into partisan corners.
House conservatives and allied pressure groups say the Alexander plan sounds to them like a bailout for insurers who’ve played along with Obamacare.
“The reality is these proposals prop up Obamacare instead of repealing it,” said Alexei Woltornist, spokesman for the Republican Study Committee, a large bloc of House conservatives that says the plan amounts to a taxpayer-funded giveaway to private health insurers.
The White House says it can support the stabilization package if it includes their own priorities, including a plan to let consumers buy short-term plans for a full year, instead of just three months. It wants to let consumers renew the plans, which don’t have to comply with Obamacare’s strict coverage requirements.
Democrats say Mr. Trump’s plan will fracture the market and water down coverage.
“I cannot support junk plans,” said Rep. Frank Pallone, New Jersey Democrat. “You get to the point where you don’t even have insurance.”
Democrats also are balking at House GOP plans to attach “Hyde amendment” language that would prevent the CSRs from funding plans that cover abortion.
House Speaker Paul D. Ryan says the language is a must, yet Ms. Murray has called it a non-starter.
Some liberal groups, meanwhile, say there’s little point in restoring the cost-sharing payments at all. They argue many consumers end up better off with the current arrangement, which, because of the way subsidies are calculated, ends up giving them more taxpayer assistance to buy coverage.
Mr. Alexander said taxpayers would be forced to pay more, however, and Congress still needs to protect millions of people who buy insurance on their own without taxpayer assistance.
He says Congress needs to set aside peripheral complaints — fast — to help people like “Marty the farmer,” a woman who stopped him at a Chick-fil-A to complain about the cost of her insurance.
“There will be 11 million people who are between jobs, who are self-employed, who are working, who literally cannot afford insurance and they’ve not going to be very happy campers,” Mr. Alexander said. “They’re going to blame every one of us and they should. They’re going to blame the president. They’re going to blame Republicans. They’re going to blame Democrats.”