Dream of Obamacare Replacement Fades to Bipartisan Patch Job


Legislation that assures the subsidies for a year or two could tie the president’s hands and reduce the uncertainty for nervous insurers. But even though some Republican congressional leaders have embraced the idea, it’s not clear whether enough Republicans will end up voting yes.

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Senator Lamar Alexander, right, will hear many ideas for improving Obamacare this week, but action is likely to be limited. He was with Vice President Mike Pence in Tennessee last month.

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Larry Mccormack/The Tennessean, via Associated Press..

Experts close to Congress have identified one other area of possible policy-making: more leeway for states that wish to manage their insurance markets in experimental ways. The Affordable Care Act already had a waiver program, but it established a very high bar for state policy experiments.

That likely package of ideas does not impress Edmund Haislmaier, a senior research fellow at the Heritage Foundation, who worked on the Trump transition team looking at regulations meant to shore up the markets. “Actually, it has nothing to do with market stabilization,” he said, noting that the subsidy payments would simply preserve the current policy environment.

Changes to the state waiver standards might change things down the road, but they are unlikely to make any difference next year. That’s because, even with new rules, states would still need to propose new plans and win approval.

On Wednesday, the Senate Health, Education, Labor and Pensions Committee, led by Lamar Alexander, will start hearing from a bipartisan group of state insurance regulators and governors, and will most likely hear a long list of other proposals. They include a request for funding to protect insurers facing huge expenses from patients with rare, very costly ailments. So-called reinsurance funds were part of Obamacare in its first three years, but they have been phased out. Many state officials think a return of the program would make the markets less risky and encourage more insurers to participate.

A reinsurance program was also part of several versions of Republican health overhaul legislation, including the bill that passed the House this spring, suggesting that Republicans are not entirely opposed to the idea. But a meaningful program would probably cost around $100 billion over a decade, a price that may be unappealing when it is untethered from the spending cuts in those bills. “That’s new money on the table with double digit B’s after it,” said Caroline Pearson, a senior vice president at the consulting firm Avalere Health.

Other ideas will be more novel still. A bipartisan group of eight governors put forward a letter to congressional leaders last week outlining a series of policy ideas. Among them: Let Americans with limited Obamacare insurance choices buy coverage through the federal employee health benefit system. Two of its Democratic authors, John Hickenlooper of Colorado and Steve Bullock of Montana, will testify before Congress on Thursday. Don’t expect that idea to go far in the short term.

Patty Murray, the ranking Democratic member of the Senate health committee, signaled as much in a recent op-ed. In The Washington Post, Ms. Murray wrote about a “multiyear solution” to the Obamacare markets. “Tying Trump’s hands in the short term is better than nothing, but without long-term solutions, insurers will likely become nervous about the future,” she wrote.

Optimistic observers say that even a small patch job for the A.C.A. this year could lead to something bigger and better. After years of partisan bickering about health reform, truly bipartisan hearings represent a change that could be more than ceremonial. Rodney Whitlock, a vice president at the lobbying firm ML Strategies, and a former aide to Senator Charles Grassley, said he could see a modest, short-term compromise to “create momentum for medium-term solutions.” He noted that the start of the 2019 enrollment period will take place just days after the November election.

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