A bipartisan bill to stabilize Obamacare’s markets would save taxpayers nearly $4 billion through 2027 and have an insignificant impact on the number of people who hold health insurance, the Congressional Budget Office and Joint Committee on Taxation said Wednesday.
The deal negotiated by Sen. Lamar Alexander, Tennessee Republican, and Sen. Patty Murray, Washington Democrat, would give congressional approval in 2018 and 2019 for what’s known as “cost-sharing reductions” — federal money sent to insurers to reimburse them for covering out-of-pocket health care costs of lower-income Americans.
Mr. Trump recently said he can no longer legally make the payments on his own, prompting fears of higher premiums.
The Alexander-Murray bill includes a provision that requires insurers to pay rebates to consumers and taxpayers, so they don’t “double-dip” by pocketing both the cost-sharing payments and higher-than-normal rates they submitted to make up for the missing payments.
Scorekeepers estimate those rebates will cut deficits by more than $3 billion over the 10-year budget window.
Mr. Alexander said the analysis proves his bill does not extend a “bailout” to insurance companies, as House conservatives and President Trump have charged.
“This nonpartisan analysis shows that our bill provides savings and ensures that funding two years of cost-sharing payments will benefit taxpayers and low-income Americans, not insurance companies,” Mr. Alexander and Ms. Murray said in a joint statement.
Overall, the bill should save the federal government $3.8 billion, the CBO said.
Conversely, the CBO this year said failing to fund the cost-sharing payments would hike deficits by $194 billion over the coming decade, since a discrete stream of taxpayer-funded subsidies — known as premium tax credits —would rise with rates.
Mr. Trump has toggled between cheering the bipartisan negotiations and criticizing the end-product, as he falsely declares Obamacare “dead” and pushes for a bill that would replace the 2010 law with state block grants.
Obamacare’s insurance exchanges will open for 2018 signups on Nov. 1, as Congress debates the program’s future.
The Centers for Medicare and Medicaid Services said that as of Wednesday shoppers can log onto HealthCare.gov and get a preview of plan choices and premiums.
Unlike the prior administration, Mr. Trump does not plan to set a signups goal for the coming enrollment period, according to a report in The Hill.
Also, the administration has slashed the open-enrollment period in half, is spending much less on outreach and says existing customers who do not pick a new plan will be auto-enrolled in the same or similar plan on Dec. 15, after open enrollment ends.
That means customers who didn’t shop around will not be able to switch if they realize their coverage is now more expensive or doesn’t cover their needs.
Wednesday’s favorable CBO score could bolster Democrats’ case for resuming cost-sharing payments under Alexander-Murray, allowing them to shore up their signature law in the near term.
In exchange, Republicans would receive long-sought flexibility for states to swiftly reshape their markets under Obamacare, although within limits.
Scorekeepers said the waivers are supposed to be budget neutral, but it is difficult to estimate whether state actions will increase or decrease how much money pours into the Treasury, since waiver amounts are based on estimates from the administration.
The Alexander-Murray deal also lets insurers offer catastrophic “copper plans” to anyone — not just people under age 30 — so healthier people have a cheaper option.
Analysts said making catastrophic plans available in a single risk pool would slightly lower premiums in the individual market, because the people who enroll will be healthier and cost less.
Because of the lower rates, scorekeepers expect the cost of subsidies would drop by $1.1 billion over the 2019-2027 period.
The Alexander-Murray deal enjoys 24 sponsors — half Democrat, half Republican — though Senate Minority Leader Charles E. Schumer says all 48 Democrats will support it on the floor, ensuring its passage.
Majority Leader Mitch McConnell says he needs full buy-in from Mr. Trump and the House before putting the bill on the floor, however.
Top Republican chairmen from the House and Senate released a competing plan Tuesday that would fund the cost-sharing payments but include more conservative provisions in exchange, complicating the effort.
All sides say the debate may wait until December, when lawmakers will feel compelled to act and may attach the cost-sharing payments to a must-pass bill to keep the federal government open.
• Tom Howell Jr. can be reached at thowell@washingtontimes.com.
Please read our comment policy before commenting.