Heavy lifting by states

Senate’s Obamacare fixes would build on heavy lifting by states

The result is an Obamacare system that’s still vulnerable, but far from the ‘disaster’ Trump and his top health officials describe.

By ADAM CANCRYN

While Congress was busy bickering over repealing the health law, officials in red and blue states worked frantically to soothe anxious insurers, tamp down rate increases and insulate their markets from the ceaseless chaos in Washington.

The result is an Obamacare system that’s still vulnerable, but far from the “disaster” President Donald Trump and his top health officials describe.

Every enrollee in the nation is poised to have at least one coverage option this fall. State regulators have haggled repeatedly to keep premiums from skyrocketing. And despite fears of bare counties and crumbling markets, the intense state-level groundwork has brought Obamacare almost single-handedly back from the brink.

“We endured a lot of sleepless nights,” Heather Korbulic, executive director of Nevada’s health exchange, said after the state successfully ended its long search for insurers to sell plans in every county. “I feel pretty good about their stability in our state.”

Still, the Senate has a few key fixes it wants to make in September. Sen. Lamar Alexander, chairman of the Health, Education, Labor and Pensions Committee, and ranking member Patty Murray are aiming to pass a narrow stabilization package by the end of the month, in what would mark the first major bipartisan changes to the 2010 law.

It's a more straightforward job than the senators faced even four weeks ago. And though a short-term fix won’t address deeper flaws or efforts by the administration to undermine the law, state officials frustrated by the stalemate on Capitol Hill are hoping their federal counterparts can now do the bare minimum to keep Obamacare afloat.

“I think we will make it through 2018,” Maryland Insurance Commissioner Al Redmer Jr. said. “However, if we don’t get some short-term solutions, I don’t think we’ll make it to the long term.”

Even the tiniest fixes could still prove tricky in a Congress deeply divided over health care, and coming off a bitter fight over dismantling Obamacare.

“Switching gears in this way ... is going to be a challenge for both sides,” said a senior Democratic aide, who cautioned against setting expectations too high.

Indeed, Alexander (R-Tenn.) and Murray (D-Wash.) have sought to limit their ambitions from the start, portraying the package as a stopgap designed to keep Obamacare hobbling along. And as states have taken the lead on plugging holes in their own markets, those ambitions have narrowed even further.

Deals struck in the past month to fill bare counties in Ohio, Wisconsin and Nevada freed the Senate from having to deliver a quick fix for thousands of people who were in danger of having no coverage options. Governors in at least a half-dozen states, meanwhile, have signaled plans to set up their own state-based reinsurance programs — lowering the odds that a similar nationwide backstop favored by Democrats will be folded into the stabilization measure.

That leaves one major unresolved issue: guaranteeing funding for Obamacare subsidies that lower out-of-pocket costs. While it’s perhaps the most direct element facing the Senate’s health committee, it’s also among the most fraught.

Trump has threatened repeatedly to pull the crucial payments to insurers — estimated at $7 billion this year — roiling health plans across the nation and prompting them to hike 2018 premiums an additional 20 percent on average, by some projections. Without assurances the funding will continue, insurers and state regulators warn, the delicate Obamacare markets they’ve held together so far could promptly fall apart.

“It’s still a big question mark, which makes the 2018 open enrollment season still pretty disconcerting,” said Ceci Connolly, CEO of the Alliance of Community Health Plans. “We can’t have this living from month to month.”

While Alexander and Murray have signaled that the cost-sharing subsidy funding will form the backbone of their bill, they differ on how many years to commit the money.

Beyond that, Republicans are likely to agitate for concessions in exchange for funding the subsidies, like giving states greater flexibility to relax key Obamacare consumer protections — a potential nonstarter for Democrats. Senate Democrats’ own ideas are sure to face sharp resistance from Republicans opposed to pouring any more money into a law they spent seven years trying to repeal.

In short, just agreeing on cost-sharing subsidies could consume the bulk of the month, potentially shrinking what was already envisioned as a narrow package.

“It’s just another sidestep,” said Tom Miller, a resident fellow at the right-leaning American Enterprise Institute. “I set low expectations, and they usually fail to meet them.”

Still, many on the ground say they’ll be satisfied with even the smallest sign of bipartisan progress, as long as it addresses cost-sharing payments.

The repeal battle in Washington left health plans and states in a seven-month lurch, trying to keep the Obamacare markets viable for 2018 while keeping abreast with the GOP’s ever-shifting replacement plan and responding to threats coming out of the White House.

A short-term stabilization package would give the insurance system a much-needed shot of certainty heading into the fall open enrollment period. For state officials, it would validate the months-long effort it took just to get to this point — and maybe set the stage for more permanent fixes before another crisis hits.

“I don’t care whether you want to repeal and return it back to the states, whether they want to modify it, repeal and repair — I don’t really care what they call it,” Redmer said. “But I’ll put it this way: The status quo is not an option.”