Senators return to Washington on Monday facing great uncertainty over whether they will be able to strike a deal to keep Obamacare’s insurer subsidies flowing now that President Trump will not be funding them.
Without the funding, the Obamacare exchanges are likely to become further destabilized as Congress heads into the midterm elections next year. Republicans also face pressure to make changes to the law after failing earlier this year to fulfill their seven-year promise to repeal Obamacare.
The debate over the insurer funds dates back to 2014, when Republicans took the Obama administration to court charging that the funds could not be allocated by the executive branch because, though authorized by Obamacare, they had never been appropriated by Congress. One federal judge sided with Republicans, but the issue has remained in legal limbo all year. Trump’s action means that Republicans will have to decide whether to oppose the subsidies on the merits rather than just as part of an effort to assert congressional power over spending.
Though individual members on both sides of the aisle that say they would be willing to appropriate the funds, it’s unclear whether the party will be able to reach a deal. Bipartisan talks involving the funding have been ongoing since early September, but conservatives have said they are unwilling to pass a bill that they see as a bailout package to insurers, while some Democrats are concerned about ceding too much of Obamacare in exchange for the funds.
The parties disagree on what should be done, with Democrats calling for more funding for Obamacare, formally known as the Affordable Care Act, and Republicans hoping to have another attempt at overhauling the law.
Sen. Bill Cassidy, R-La., said Sunday he believed Congress should appropriate the funds in exchange for greater flexibility for states, though he said he believed Trump had made the right decision on the payments.
“The payments are unconstitutional, according to a court, and his first responsibility is to uphold that,” Cassidy said on “Fox News Sunday.” “We absolutely have to think about that family around the kitchen table, which is why I think Congress should pass them.”
The funds in question, known as cost-sharing reduction subsidies, are expected to reach $9 billion in 2018. They go to insurers to help them provide lower out-of-pocket medical costs for low-income customers. Without them, the Congressional Budget Office expectspremiums on mid-level Obamacare plans to rise by 20 percent, which in turn would trigger higher federal taxpayer subsidies to help individuals purchase insurance. As a result, the CBO expects deficits to rise by $194 billion over a decade.
Trump made it clear last week that he intended his action to jump-start an agreement on healthcare.
“What would be nice [is] if the Democratic leaders could come over to the White House, we’ll negotiate some deal that’s good for everybody,” Trump said Friday. “That’s what I’d like.”
“The Democrats should come to me, I would even go to them,” he added.
Trump decided Thursday to quit authorizing the Obamacare payments after doing so around the 20th of each month since taking office.
Whether funded or not, insurers are likely to sue for the money, as they must offer discounts to patients for out-of-pocket medical costs regardless of whether they are reimbursed. If Congress were to appropriate the funds, they could avoid a massive slew of legal battles.
But arriving at an agreement is expected to be difficult. Democrats have expressed distrust against Republicans for their efforts to overhaul Obamacare, and have said that an executive order Trump signed Thursday aimed at loosening Obamacare’s rules signaled that he is not committed to the law’s success.
The Senate Health, Education, Labor and Pensions Committee has been working on a bipartisan deal to help stabilize the Obamacare exchanges, one that would include two years of funding for the cost-sharing payments. Sen. Lamar Alexander, the committee’s chairman, told reporters recently that Democrats, led by top-ranking Sen. Patty Murray, D-Wash., had not offered them enough flexibility, both in how states could implement Obamacare and how quickly the changes they made to the law could be greenlighted by federal officials.
Murray said that she was “optimistic” that a deal could be reached, and Sen. Lindsey Graham, R-S.C., who golfed with Trump this weekend, said on CBS’ “Face the Nation” the president was supportive of Alexander’s efforts.
Sen. Susan Collins, R-Maine, a centrist Republican who has been working to find a bipartisan solution on healthcare and who disagreed with Trump’s decision on the subsidies, indicated Sunday she believed Democrats had not offered enough during healthcare talks.
“We’ve all had input, there were four great hearings,” she said of the HELP Committee on ABC’s “This Week.” “I hope we can all proceed, but Democrats are going to have to step up to the plate and assist us. It’s a two-way street.”
The bipartisan deal might not be the only avenue. Senate Minority Leader Chuck Schumer said that the funds could be appropriated through the omnibus spending deal, which would be negotiated ahead of Dec. 8, when the government will run out of funding. Trump, however, has indicated in interviews and in public comments that he would like to see Republicans and his administration receive something in return.
Congress is facing a long list of priorities. On the docket this week for Congress is arriving at a budget. Senate Majority Leader Mitch McConnell, R-Ky., is having lunch with Trump on Monday to discuss the fall agenda.
Further complicating the timeline is that Congress has not reauthorized the Children’s Health Insurance Program, or CHIP, which ran out at the end of the fiscal year on Sept. 30. States will not run out of funding for several months, but lawmakers still haven’t arrived at a deal about how to fund the program, which covers more than 9 million children and expires every five years.
A top Democrat accused Republicans of using the program to hurt Obamacare and Medicare, because they had proposed making changes to those programs to fund CHIP.
“Republicans remain fixated on sabotaging the ACA anyway they can,” said Rep. Frank Pallone, D-N.J., in a statement issued Friday. “I reject the premise that we can only offer health care to children by taking it away from others, and, to date, Republicans refuse to budge in that regard. For weeks, I’ve said that a partisan Republican bill puts health care at risk for millions of children and families, and unfortunately that appears to be the path House Republicans are prepared to take.