WASHINGTON — With their tax bill behind them, Republicans turned Wednesday to managing the legislation's potential fallout on health care, where a key provision threatens to further upend the existing insurance market.
President Donald Trump boasted at a Cabinet meeting on Wednesday that Obamacare had been "repealed," citing the tax bill's elimination of the individual mandate, which penalized Americans who go without health insurance.
"In this bill, not only do we have massive tax cuts and tax reform, we have essentially repealed Obamacare and we'll come up with something that will be much better," Trump said.
While the mandate is a key component of the Affordable Care Act, the law's subsidies and regulations are still in effect. Millions have already signed up for 2018 coverage through the law during this month's open enrollment period, despite a sharp decline in outreach efforts under the Trump administration.
But Republicans have repeatedly failed to reach consensus in the Senate on a replacement bill, and experts warn the mandate change is likely to saddle fragile insurance exchanges with more instability. The nonpartisan Congressional Budget Office (CBO) predicts that 13 million fewer people will have coverage after a decade without the mandate and that premiums on the individual insurance market will rise an additional 10 percent per year.
Shortly after Trump's remarks, two key Republican Senators who had negotiated a modest bipartisan package to help stabilize insurance markets announced that their plan would not be included in an upcoming spending deal.
"Rather than considering a broad year-end funding agreement as we expected, it has become clear that Congress will only be able to pass another short-term extension to prevent a government shutdown and to continue a few essential programs," Sens. Lamar Alexander of Tennessee and Susan Collins of Maine said in a joint statement.
Collins, who tied her support for the tax bill to an additional fix to health care, added that she had assurances from Speaker Paul Ryan, R-Wis., that they would address the issue next year.
"It looks like the Christmas present of lower health insurance premiums will now have to be a Valentine's Day present," Alexander said.
But it's no slam dunk: Conservatives are wary of legislation seen as supporting Obamacare's exchanges and Collins also expressed concern in her statement that Democrats might withdraw their prior support as a political protest. Trump has also talked up plans to let health care markets "implode" in order to pressure Democrats into backing a repeal bill.
Insurance companies pushed hard for Alexander-Murray, which would fund cost-sharing reduction payments (CSRs) that subsidize out-of-pocket costs for lower income customers. Trump cut the payments off this year, citing a legal dispute over how they were drafted.
But Democrats complained this week that passing the bill would not do enough to make up for ending the individual mandate, which insurers say is necessary to attract healthier customers who offset the cost of accepting sicker customers without regard for pre-existing conditions.
"The health care stabilization bill I worked on with Chairman Alexander and Senator Collins' reinsurance bill are both good bills that would help push back against President Trump's sabotage of health care, but they won't stop the premium increases, coverage losses and chaos that the Republican tax bill would cause — and that's assuming they could even pass through the Republican House," Sen. Patty Murray, D-Wash., Alexander's co-sponsor for the bill, said in a statement on Tuesday.
CBO director Keith Hall said in a letter in November that passing Alexander-Murray would not change the office's assessment that removing the mandate would lead to millions more uninsured and higher premiums. Insurers have largely priced in the changes for 2018 enrollment, and in many cases customers actually are seeing significantly lower premiums this year thanks to a quirk in the law that companies and state regulators turned to their advantage.
Potentially more significant is a separate proposal backed by Collins and co-sponsored by Sen. Bill Nelson, D-Fla., that would provide $5 billion toward a reinsurance program to help insurers pay for their most expensive patients in order to reduce premiums. Collins said Ryan was "committed" to passing some form of reinsurance next year as well.
A report by consulting firm Oliver Wyman Health estimated that the reinsurance fund could reduce premiums by 20 percent, enough to offset the 10 percent increase from the mandate. A separate report this month by Avalere predicted the combination of funding CSRs and reinsurance would "help mitigate" the tax bill’s changes, but warned that it would need consistent funding and that the loss of the mandate would still lead to instability.
