Renewed Fight Over Obamacare Could Prompt Government Shutdown

Renewed Fight Over Obamacare Could Prompt Government Shutdown

Kevin Lamarque / REUTERS

The bitter partisan warfare over health care reform intensified on Thursday when congressional Democrats threatened to shut down the government this weekend if House Republicans try to move forward with a retooled bill to repeal and replace the Affordable Care Act.

The notion of another government shutdown seemed unthinkable once Congress returned this week from a two-week recess. That was especially true after President Trump withdrew his demands for immediate funding to begin building a wall along the southern border with Mexico and appeared to signal a willingness to temporarily continue “cost-sharing” subsidies for insurers who reduce the out of pocket costs charged to low-income policyholders.

Related: Republicans in Congress Don’t Want to Give Up their Obamacare Benefits

Insurers say the subsidies are essential for them to remain in the Obamacare market.

With Trump pulling back, congressional Republican and Democratic leaders appeared to be on a fast track to approve at least a one-week extension of this year’s spending authority to avoid another government shutdown.

But the political dynamic abruptly changed on Wednesday, after members of the arch-conservative House Freedom Caucus that blocked an earlier Trump-GOP bill to dismantle Obamacare announced they would support a new, more conservative version hammered out by White House officials, Freedom Caucus leaders and moderate Rep. Tom McArthur (R-NJ).

The new compromise would allow states to opt out of certain insurance mandates under the Affordable Care Act, including the requirement that health plans cover “essential medical benefits” and a ban on charging people higher premiums if they have preexisting medical conditions.

With conservative groups including the Club for Growth and Heritage Action suddenly announcing their support, the compromise House GOP plan suddenly began to gather momentum, even though it faced opposition from many moderate Republicans concerned that their constituents would lose coverage in the individual insurance markets or through expanded Medicaid.

Related: Republicans Are Trying Again on Obamacare Repeal: Here’s the New Plan

Trump pressed the House to act on a health care bill this week to redeem himself after suffering an embarrassing setback on healthcare in late March and to top off his first 100 days in office. However, House Speaker Paul Ryan (R-WI) cautioned today that talks were continuing behind the scenes and that he would not bring the compromise GOP health care plan to the floor until he was certain he had the necessary votes to pass it.

Rep. Steny Hoyer of Maryland, the Democratic minority whip, infuriated Trump and threatened congressional Republican leaders.

"If Republicans announce their intention to bring their harmful TrumpCare bill to the House Floor tomorrow or Saturday, I will oppose a one-week Continuing Resolution and will advise House Democrats to oppose it as well,” Hoyer said in an email. Although Senate Minority Leader Chuck Schumer (D-NY) was far more positive than Hoyer or Pelosi in a floor speech this morning, he too warned the House against jamming through a measure to repeal Obamacare that has little chance of surviving in the Senate.

The threat must be taken seriously because GOP leaders will almost certainly need Democratic votes to pass a short-term continuing resolution in the House and Senate in the face of almost certain conservative opposition to increased spending on defense and domestic programs.

Related: How the Trump Administration Can Undermine Obamacare

Trump launched a barrage of angry tweets in the face of the threats from Hoyer and House Minority Leader Nancy Pelosi (D-CA), who directly warned Ryan of the possible spending impasse.

Ironically, the Trump administration has just given a key element of Obamacare a brief reprieve by allowing the insurance industry to continue drawing down on the $10 billion annual subsidy that enables them to reduce the out-of-pocket costs of low-income policyholders.

Related: One Major Obamacare Insurance Company Is Close to Break Even

The cost-sharing subsidy has been challenged by Republicans for years, despite the Obama administration’s best efforts to preserve it. House Republicans filed suit against the subsidies in federal court arguing that Congress never specifically appropriated money for it and won a verdict last year. While the Obama administration filed an appeal to challenge the ruling, it’s unlikely the new Trump administration will fight in court to preserve the subsidy.

Ryan ruled out the possibility that Congress would appropriate funds for the subsidy as part of a pending continuing resolution to keep the government operating, saying it was up to the Trump administration to decide whether to preserve the subsidy.

“Obviously, we’re not doing that,” Ryan told reporters on Tuesday. “That’s not in an appropriations bill. That’s something separate that the administration does.” 

However, insurance industry advocates need more of a guarantee that the subsidy will still be available next year – and that requires congressional action to lock in the payments. "Our position has not changed – The American people need Congress to fund CSRs now," Kristine Grow, spokeswoman for America's Health Insurance Plans (AHIP), told The Hill yesterday