Health 202: Republicans could lower Affordable Care Act premiums. But will they?

Tuesday , March 13, 2018 - 8:20 AM

Paige Winfield Cunningham

(c) 2018, The Washington Post.

Republicans are once again stuck between a rock and a hard place on the Affordable Care Act (ACA). They could significantly lower 2019 premiums by making extra payments to insurers. But their base is protesting loudly against such a move.

Passing two measures aimed at stabilizing the ACA marketplaces by infusing insurers with more funds would lower monthly premiums by 20 to 40 percent and prompt an additional 3.2 million people to get covered, says an attention-grabbing independent analysis released yesterday by the firm Oliver Wyman.

These measures - which would pay insurers for extra cost-sharing discounts for the low-income and reimburse them for their most expensive customers - are currently stuck in political limbo as leaders on Capitol Hill consider whether to include them in a massive, must-pass spending bill next week.

The bills have become emblematic of inter and intraparty disputes over how to approach a world with most of the ACA still in place. Democrats are bitter that Republicans are still chipping away at parts of the law by repealing its individual mandate and changing other provisions through the executive branch. And Republicans can’t even agree among themselves how to handle the law now that they’ve failed to entirely wipe it from the books.

Republican moderates, who feel they have a responsibility to try to improve the marketplaces for customers, pointed to the Wyman report as more evidence that this is the right route. They say insurers need more incentive to stay in the system and halt massive rate hikes, which plagued the exchanges this year.

“This analysis. . . further demonstrates that our bipartisan proposals will help drive down premiums in the individual market and make health insurance more affordable for millions of Americans,” GOP Sens. Lamar Alexander (Tenn.) and Susan Collins (Maine), the measures’ GOP sponsors, said in a joint statement.

But 14 leading conservative groups are sticking with their characterization of the payouts as a “bailout” of the health-insurance industry - a term they started using to criticize the Obama administration, which made the payments without approval from Congress.

The cost-sharing reductions and reinsurance payments “do nothing to address the real reasons premiums and deductibles are rising,” Heritage Action, Americans for Prosperity, FreedomWorks and other groups wrote in a letter to leadership yesterday, adding those problems are caused by “the law’s regulations, mandates and subsidy structure.”

“Lawmakers should not be fooled by ludicrous claims that spending new federal money on Obamacare bailouts will save the federal government money,” they wrote. “The same insurers who are lobbying for bailout money this year will be back again when funding expires, threatening to withdraw from the exchanges or raise premiums if bailouts aren’t extended.”

Those “ludicrous claims” the groups were referring to are actually from the Congressional Budget Office, the official nonpartisan scorekeeper for Congress that both parties typically trust to estimate the cost and impact of legislation.

The CBO said last August that withholding the payments to insurance companies would actually cause the government to spend more money on subsidies for monthly premiums, which a wider swath of Americans can access.

If the conservative groups don’t have those facts on their side, it appears they don’t have public support for their position either. Nearly 60 percent of voters around the country favor making the payments to insurers, compared to just 33 percent who don’t want them made. And that’s according to a poll commissioned by the American Action Forum, a conservative group led by former CBO director Douglas Holtz-Eakin.

Plus, industry is of course on the side of making the payments. “Immediate action is necessary to reduce premiums for individual and families that purchase coverage on their own,” America’s Health Insurance Plans, the American Medical Association, the American Hospital Association, the U.S. Chamber of Commerce and several other groups wrote to congressional leaders earlier this month.

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