As Democrats try to head off a looming premium hike for Affordable Care Act plans that could affect millions, Senator Joe Manchin, D-W.Va. is said to be sounding out options for a fix that might fit into a larger bill, although he has made no commitment.
Manchin is in talks with Senate Majority Leader Chuck Schumer on a filibuster-proof economic package that is currently centered on spending $500 billion and raising $1 trillion in revenue, according to two sources familiar with the talks.
While the details remain in flux, the bill is focused on energy, taxes, and drug prices. One source said the “ceiling” for energy funding is $300 billion. And the drug pricing measure is expected to save money.
That makes the ACA subsidies, which were boosted for two years in the 2021 pandemic relief bill, a potential fit for the remaining space. The cost of continuing them permanently would be $220 billion, according to the Congressional Budget Office.
Manchin has not closed the door to extending the expiring ACA money in such a bill. A source familiar with Manchin’s thinking said he isn’t pushing for it, but that the funding would not necessarily be a deal-breaker. The source, who was granted anonymity to discuss a sensitive topic, said the senator has been looking at options to do it at lower cost.
“He understands the ACA,” the source told NBC News. “He’s campaigned on it.”
If Manchin does want changes to the ACA subsidies, there are ways to meet his potential demands on means-testing benefits and lowering costs, according to Marc Goldwein, a policy expert at the Committee for a Responsible Federal Budget.
One idea that CRFB, which advocates for lower deficits, has put forward is trimming subsidies at the top, either by cutting off benefits after a certain income threshold or phasing them out more gradually.
Another source of savings could be reversing a 2017 move by President Donald Trump that cut off payments to insurers to help cover out-of-pocket costs for lower-income customers. Although it was widely seen at the time as a move to sabotage the ACA, states soon found a way to restructure their marketplaces in response to offer more insurance subsidies than before.
Goldwein estimated that restoring the pre-Trump system could save as much as $200 billion over 10 years, which could go toward bolstering ACA benefits. But it may face opposition from Democrats as it would blunt some of the consumer savings from the funding.
Manchin has expressed openness to covering low-income uninsured residents in states that haven’t expanded Medicaid, but the Medicaid fix that passed the House earlier is unlikely to fit in a Senate bill that includes ACA funding. The CBO estimated it’d cost $180 billion.
It might be technically possible to address both issues if the Trump-era insurer payments were restored and each component was sufficiently scaled back.
“I could get it down to $200 billion,” Goldwein said. “That may be different than whether they can.”