Sen. Lamar Alexander Thursday became the second prominent Republican in a week to recommend that the Trump administration reimburse Obamacare insurers for $9 billion the companies will pay this year to help low-income plan members pay for coverage.
The Affordable Care Act requires individual insurers to provide the financial assistance, known as cost-sharing subsidies, to help pay deductibles, coinsurance and other out-of-pocket costs for enrollees with incomes below 250 percent of the federal poverty level.
The Trump administration has, so far, refused to provide the money, thinking it will prompt congressional Democrats to negotiate with Republicans on legislation to repeal the Affordable Care Act.
But without the reimbursements, Obamacare insurers are having difficulty setting their 2018 premiums as federal and state rate-filing deadlines rapidly approach. Experts say marketplace premiums would spike up to 20 percent next year if the money is withheld. Other insurers would likely exit the individual market entirely.
On Thursday, during a subcommittee hearing of the Senate Committee on Health, Education, Labor and Pensions, Alexander, who chairs the HELP committee, told Health and Human Services Secretary Tom Price that the Trump administration should pay the subsidies this year.
“And we should probably go ahead and do it through 2019,” Alexander continued…“The payments will help to avoid the real possibility that millions of Americans will literally have zero options for insurance in the individual market in 2018.”
Tennessee has been one of the nation’s most troubled individual insurance markets as prominent carriers like Humana, UnitedHealthcare and Blue Cross Blue Shield of Tennessee have left entirely or pulled out of most large urban markets.
Last week, Rep. Kevin Brady, R-Texas, Chairman of the influential House Ways and Means Committee, called on Congress to okay the money as well, citing the need to stabilize insurance markets.
Price said the payments are under review by the Trump administration, but because they are the subject of an ongoing lawsuit, he could not comment on the administration’s plans. He noted, however, that President Trump’s budget proposal “reflects the continuation of the (subsidy) payments until litigation is resolved.”
The lawsuit, brought by House Republicans against HHS during the Obama administration, claims the payments are illegal because they aren’t authorized by Congress through the proper legislative process.
U.S. District Court Judge Rosemary Collyer ruled in favor of Republicans. She ordered the payments be stopped, but suspended the order while the Obama administration appealed. The appeal, inherited by the Trump administration, has been put on hold.
Both Brady and Alexander feel Obamacare is crumbling under its own weight due to high costs and a lack of young, healthy enrollees. But their recommendations to fund the subsidies indicate that Republicans are mindful of the potential election-year chaos that would ensue if the subsidies weren’t paid.
“As a part of a transition from a collapsing market to a stable market, I believe Republicans will need to do some things temporarily that we don’t want to do in the long-term,” Alexander said of the subsidy payments
A host of groups representing hospitals, patients and care providers have urged the Trump administration to continue the payments. So has America’s Health Insurance Plans, the industry’s main trade group.
In an e-mail statement, Kristine Grow, AHIP’s senior vice president for communications, said she appreciates “that policymakers recognize how essential it is to stabilize the individual market. Supporting CSR funding and other stabilization programs will help ensure stability and choice for Americans who buy their own insurance.”