Why a Top Republican Wants to Keep Paying the Obamacare Insurers
Policy + Politics

Why a Top Republican Wants to Keep Paying the Obamacare Insurers

REUTERS/Gary Cameron

With insurance companies sounding louder and louder alarms about their ability to continue providing health coverage to people in the insurance exchanges set up under the Affordable Care Act, at least one influential Republican appears to be resisting the Trump administration’s refusal to commit to continued payment of a key subsidy.

Under the ACA, one of the programs put in place to help insurers provide below-market rate premiums to low income Americans was the provision of what are known as cost-sharing reduction payments to insurers. These were meant to bridge the gap between the premiums paid and the actual cost of providing coverage at a profit.

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However, Republicans in the House of Representatives filed a lawsuit seeking to have the payments declared illegal, and the Trump administration has repeatedly refused to commit to their continued payment.

The result is that insurance firms across the country are warning that they will either have to hit customers with large rate increases to make up for the risk of payments being cut off, or will have to stop serving all or part of the exchange system entirely.

Republicans have insisted that the ACA is a flawed system that is collapsing under its own weight, but repeated statements from nonpartisan analysts and from insurers themselves indicate that the biggest problem facing the marketplace right now is uncertainty about the government’s position when it comes to supporting the exchanges.

In prepared remarks delivered before a House Ways and Means Committee hearing on the Department of Health and Human Services’ budget request Thursday, Chairman Kevin Brady came out and called for Congress to specifically allocate money for the CSR payments.

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“Obamacare’s design flaws were not the fault of the American people,” Brady said. “The people now trapped in Obamacare did what the government mandated them to do – they complied with the law. They should not be left out to dry.

“As the Senate considers the AHCA, we must work together to deliver an expedited solution to help stabilize the insurance market and help lower premiums for Americans trapped in Obamacare today. We should act within our constitutional authority now to temporarily and legally fund Cost Sharing Reduction payments as we move away from Obamacare and toward a patient-centered system that truly works for the American people.”

He also indicated that he accepts the claim of insurance firms that uncertainty about government support for the ACA is part of the problem with the market right now.

“Insurers have made clear the lack of certainty is causing 2018 proposed premiums to rise significantly,” he said. “When these payments are funded by Congress, families trapped in Obamacare should expect these proposed premiums to be reduced significantly.”

Brady’s statement seems, at least implicitly, to suggest that the effort to replace the ACA with the GOP-sponsored American Health Care Act may not come to fruition in time to rescue the health insurance markets.

It is unclear whether or not there would be broad support among congressional Republicans for funding the CSR payments, which many have characterized as a “bailout,” but by calling for it from his influential perch atop Ways and Means, Brady also appears to be signaling a recognition among GOP leadership that policies that seem calculated to weaken the marketplaces are a potential political problem that needs to be addressed.