Bipartisan Health Bill Is Losing Support

By Stephanie ArmourFeaturesDow Jones Newswires

The seemingly imminent repeal of the Affordable Care Act's insurance requirement, which could happen next week as part of the final passage of Republicans' broad tax overhaul, has focused attention on Congress' potential next moves on health care, including a bipartisan plan to shore up the insurance markets.

But that plan, sponsored by Sens. Lamar Alexander (R., Tenn.) and Patty Murray (D., Wash.), is losing support as more health analysts say it could raise costs for many consumers. The bill would restore payments to insurers, allowing them to cut premiums, but in doing so it would reduce the tax credits that are pegged in part to the premium costs of certain plans.

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Senate Minority Leader Chuck Schumer of New York and other Democrats also say they will no longer back the bipartisan plan if Republicans push ahead with plans to undo the ACA's individual mandate requirement, which they see as a violation of the Alexander-Murray deal.

The bipartisan bill emerged as an issue during debate on the tax overhaul. Sen. Susan Collins (R., Maine) supported the Senate version of the tax plan, including its repeal of the ACA mandate, after saying she obtained a commitment from Senate Majority Leader Mitch McConnell (R., Ky.) to pass the Alexander-Murray bill.

Ms. Collins declined to comment for this article. But a spokesperson said the bill would lower premiums and enable more people to get subsidies that also help them with out-of-pocket medical expenses. The senator has said she remains confident the Alexander-Murray bill will pass by year's end.

The Alexander-Murray legislation would temporarily restore federal "cost-sharing reduction" payments to insurers, which were halted in October by President Donald Trump. Those payments paid insurers for providing mandatory subsidies to some low-income consumers, and the halt in funding prompted many to raise premiums next year.

But in a twist, subsidized consumers will generally be paying less in 2018. That's because federal tax credits they receive to help with premiums are based in part on the prices of popular, mid-cost insurance plans -- so if those premiums go up, so will the tax credits.

Some consumers will even end up obtaining plans at no cost to them.

The bipartisan bill could ultimately undo this effect, some analysts said.

"Passing Alexander-Murray would reverse all that for 2019, which is negative in my view," said Matthew Fielder, a fellow at the Brookings Institution, a Washington-based think tank. "All things considered, I come down against Alexander-Murray on net at this stage."

Larry Levitt, a senior vice president at the Kaiser Family Foundation, agreed that many consumers haven't been hurt by the cutoff of payments to insurers, and some are better off. "So the case for Alexander-Murray in terms of protecting consumers is much weaker than it was a few months ago," he said. He said there were benefits to the bill, however, including the symbolism of forging a bipartisan path on health care in a very divided Congress.

However, many analysts agree that restoring the federal payments would benefit the roughly seven million people who earn too much for the tax credits. But in some cases even those people have been able to shop around and get plans with lower or similar premiums, analysts said.

"On one hand, the lack of CSR payments has improved affordability for subsidized consumers," said Caroline Pearson, a senior vice president at health consulting firm Avalere Health. "On the flip side, non-subsidized consumers have real sticker shock."

Mr. Alexander argues that the bipartisan plan would greatly benefit consumers. This month he cited an Avalere study that found passing the Alexander-Murray plan by the end of the month would lower premiums on the individual market.

Despite assurances from Senate leaders that the Alexander-Murray bill would pass, House Speaker Paul Ryan (R., Wis.) has told other congressional leaders he was not part of any such deal. Many Republicans oppose restoring the cost-sharing subsidy payments, describing them as a bailout of insurers, a characterization rejected by insurers themselves since they are required by law to offer subsidies.

Ending the federal payments would save about $118 billion in federal funding by 2026, according to the Congressional Budget Office, while costing the government an estimated $247 billion more over the same time because of the heftier tax credits and swelling ACA enrollment that is projected with more generous tax credits.

Some Democrats say the Alexander-Murray bill, which took weeks of negotiation to assemble, was intended as a stand-alone deal, and that the GOP move to repeal the ACA insurance requirement at the same time violates its spirit.

"There's no question that Alexander-Murray is an ineffective response to the health-care sabotage included in the tax bill," Ms. Murray's office said in a statement.

(END) Dow Jones Newswires

December 14, 2017 15:08 ET (20:08 GMT)