Senators have deal on health subsidies, and Trump supports it
WASHINGTON — Two leading senators, hoping to stabilize teetering health insurance markets under the Affordable Care Act, reached a bipartisan deal on Tuesday to fund critical subsidies to insurers that President Trump moved to halt.
At the White House, virtually as the deal was being announced, Trump voiced support for it while insisting that he would move forward to repeal Barack Obama’s signature health law.
The plan by the senators, Lamar Alexander, Republican of Tennessee, and Patty Murray, Democrat of Washington, would fund the subsidies for two years, a step that would provide at least short-term certainty to insurers. The subsidies, called cost-sharing reductions, go to insurance companies to offset their costs for helping low-income customers with out-of-pocket health care expenditures such as deductibles and co-payments.
Without them, insurance companies said, premiums for all customers purchasing plans under the Affordable Care Act would shoot up, and with profits squeezed, some companies would leave the market.
“In my view, this agreement avoids chaos,” Alexander said, “and I don’t know a Democrat or a Republican who benefits from chaos.”
Trump appeared to back it, even as he berated insurance companies, declared the Affordable Care Act “virtually dead,” and promised the demise of the health law in due time.
“It’ll get us over this intermediate hump,” the president said at a Rose Garden news conference, describing it as “a short-term solution so that we don’t have this very dangerous little period.”
If approved, the deal could provide a reprieve for the Affordable Care Act that would prevent 2018 premiums from increasing as much as they might otherwise have gone up. But consumers in many states will still face double-digit rate increases, and in many counties, health plans will be available from only one insurer.
Moreover, Republicans are still intent on repealing much of the Affordable Care Act, and an executive order issued last week by Trump could destabilize markets in 2019 and later years by encouraging sales of plans that skirt the coverage requirements of the health law.
“For a period of one year, two years, we will have a very good solution,” Trump said. “But we’re going to have a great solution, ultimately, for health care.”
The bipartisan push to save the subsidies was supported by Massachusetts Governor Charlie Baker, a Republican who has urged Congress to ensure the payments continue.
His spokesman, Brendan Moss, said Tuesday that the governor wants Congress to pass a fix that prevents “massive budget cuts’’ in the state’s bid to provide quality health care. The subsidies help 155,000 people in the state afford insurance.
Alexander, the chairman of the Senate health committee, said that in addition to funding the payments to insurers, the deal would give states “more flexibility in the variety of choices they can give to consumers” — a change that should appeal to Republicans eager to give states more say.
“This takes care of the next two years,” Alexander said. “After that, we can have a full-fledged debate on where we go long term on health care.”
The agreement bears the hallmarks of bipartisanship. For Republicans, state governments would find it easier to obtain such waivers from certain requirements of the Affordable Care Act. But there would be explicit protections for low-income people and people with serious illnesses.
For Democrats, not only would the cost-sharing reductions be brought back, but millions of dollars would be restored for advertising and outreach activities that publicize insurance options available in the health law’s open enrollment period, which starts next month. The Trump administration had slashed that funding.
“We will spend about twice as much or more than President Trump wanted to expend,” Alexander promised.
Accusing Trump of taking steps to “sabotage health care in our country,” Murray said, “I’m really glad that Democrats and Republicans agree it’s unacceptable, and that the uncertainty and dysfunction cannot continue.”
Senator Chuck Schumer of New York, the Democratic leader, hailed the deal as a model for how the parties could work together on other issues, such as taxes. “I don’t expect the Republicans to give up their goal of repealing ACA,” Schumer said. “But in the meantime, stabilizing the system, preventing chaos, and stopping the sabotage is in everybody’s interest.
The issue of cost-sharing subsidies arose after a federal district judge ruled in 2016 that the payments were unconstitutional because Congress had never appropriated money for them. Trump, whose administration has been taking steps to undermine the health law, declared last week that he would cut off the payments.
The effect of the cutoff probably would have been felt most by middle-income consumers. Even without the payments, the Affordable Care Act still would require insurers to reduce out-of-pocket costs for eligible consumers. Premium increases sought by insurers to offset the loss of federal money would hit consumers who never got the subsidies.
A coalition of state attorneys general filed suit on Friday, and Congress immediately came under pressure to take action to ensure that the payments would continue. Doctors, hospitals, and insurers, as well as the National Governors Association and the US Chamber of Commerce, urged lawmakers to provide the funding.
It remains to be seen whether conservative-leaning Republicans will get on board with the agreement, and whether the House will accept it.
Some Republicans have already said they do not wish to provide what they describe as a bailout to insurers.
“I think it would be a mistake for Congress to provide billions in bailouts to insurance companies without providing meaningful relief to the millions of Americans who have been hurt by Obamacare,” Senator Ted Cruz, Republican of Texas, said Tuesday before the deal was announced.
Another leading conservative, however, Representative Mark Meadows of North Carolina, the chairman of the hard-line House Freedom Caucus, described the agreement as a “good start,” but said “much more work needs to be done.”
“Most importantly,” he added, “it bears repeating: Republicans cannot allow short-term solutions to become a distraction to repealing and replacing Obamacare — something we’ve promised to do for seven years.”
Senate majority leader Mitch McConnell did not say if the Senate would take up the plan.
Priyanka Dayal McCluskey of the Globe staff contributed to this report.