Bipartisan discussions spearheaded by the U.S. Senate’s Committee on Health, Education, Labor and Pensions may lead to legislation that will continue cost-sharing reduction (CSR) payments to insurance companies providing health insurance policies on government healthcare exchanges and extend greater flexibility to states in developing solutions to their healthcare challenges for another two years.
Senator Lamar Alexander (R-Tenn.), the committee chair and the Senator Patty Murray (D-Wash.), the Ranking Member of the committee, have reached an agreement that would involve a two-year extension of CSR payments to insurance companies providing health insurance policies on government healthcare exchanges. It also could result in greater flexibility to states in developing solutions to their healthcare challenges.
According to a report by the Associated Press, “Majority Leader Mitch McConnell, R-Ky., was noncommittal while Minority Leader Chuck Schumer, D-N.Y., welcomed the agreement as a step forward that will provide stability for insurance markets in the short-term.” The report also noted that President Trump apparently supports the compromise agreement. Both Trump and McConnell had expressed some openness to the Senate committee’s efforts after the failure of their ACA repeal and replace efforts in the Senate. The failure seemed to clear the way for the committee to pursue a bipartisan solution to address near-term issues with health insurance markets.
The agreement, if approved, could stave off anticipated increases in insurance premiums on exchanges. A Congressional Budget Office report has said that termination of CSR payments could increase healthcare premiums by 20% in 2018 and increase the federal budget by $194 billion over the next decade.
The Senate committee’s efforts to reach a compromise agreement on CSR payments was heightened by the joint announcement by U.S. Health and Human Services Acting Secretary Eric Hargan and Centers for Medicare & Medicaid Services Administrator Seema Verma announcing that cost-sharing reductions payments will be discontinued immediately based on a legal opinion from the Attorney General:
“It has been clear for many years that Obamacare is bad policy. It is also bad law. The Obama Administration unfortunately went ahead and made CSR payments to insurance companies after requesting – but never ultimately receiving – an appropriation from Congress as required by law. In 2014, the House of Representatives was forced to sue the previous Administration to stop this unconstitutional executive action. In 2016, a federal court ruled that the Administration had circumvented the appropriations process, and was unlawfully using unappropriated money to fund reimbursements due to insurers. After a thorough legal review by HHS, Treasury, OMB, and an opinion from the Attorney General, we believe that the last Administration overstepped the legal boundaries drawn by our Constitution. Congress has not appropriated money for CSRs, and we will discontinue these payments immediately.”
Apparently, the HHS action has served as a catalyst to help Republicans and Democrats reach a potential compromise agreement. The question now is will the rests of Congress come along to prevent economic hardship for the many Americans, including entrepreneurs, who count on the ACA for health insurance.