Senators Strike Bipartisan Deal on Short-Term ACA Fix

Last month, the Senate’s Health, Education, Labor & Pension (HELP) committee held a series of hearings and meetings with other Senators and experts to identify a bipartisan agreement to provide a short-term fix for the Affordable Care Act (ACA). A fix is needed to address the cost-sharing reductions (CSRs) or “subsidies” to help low-income Americans cover their insurance deductibles and co-pays, especially after President Trump announced he would be ending payments.

Based on those hearings, on October 17th, Senate HELP Committee Chairman Lamar Alexander (R-TN) and Ranking member Patty Murray (D-WA) have announced their bipartisan deal to shore-up the ACA for the next two years while Congress and the Administration continue to work toward a long-term fix or are able to pass a GOP ACA repeal and replace bill.

According to the Senators, their deal would stabilize the individual health insurance market by continuing the cost-sharing reductions through 2019 and providing more flexibility to states to obtain waivers from Human and Health Services (HHS) for their state exchanges. Most Democrats support it; most Republicans oppose it. President Trump has both endorsed and criticized the deal. Many House and Senate Republicans have voiced their opposition to a bill seen to “fix” the ACA, and the congressional calendar is already jammed with must-pass legislation and the Republican tax reform effort.The two Senators will now seek co-sponsors for the bill, then provide the legislation to Senate Majority Leader Mitch McConnell and Minority Leader Chuck Schumer to determine when and whether to bring it to the Senate floor. It will be an uphill battle for Senators Alexander and Murray to pass their compromise bill.

Current provisions in the bipartisan bill:

  • Guarantees CSR for 2017-2019.
  • Provides over $100 million for exchange outreach and enrollment support for 2018 and 2019.
  • Enables Americans over the age of 30 to enroll in a catastrophic plan that was previously limited to a younger population. It also maintains these catastrophic plans in a single risk pool in an effort to keep insurance costs down for high risk populations. These plans are not HSA-qualified.
  • Provides more flexibility to states who seek to waiver from HHS on the plans available on state exchanges by extending the time period of waivers from five years to six years.
  • Allows states to use “Me Too” waivers, so that states can simply copy what another state has already implemented under an approved HHS waiver without having to go through the entire waiver process.
  • Shortens the HHS waiver review timeframe from 180 days to 90 days, and 45 days in an emergency where a state will have counties with new insurance options.
  • Maintains the essential health benefit and affordability requirements of plans offered by states.

Currently, the CDH-industry supported provisions to increase the use and availability of HSAs and other CDH accounts are not included in this legislation. The industry will continue to meet with Congress to encourage inclusion of those provisions in either this or future legislation.

Chance and timing of enactment

Chances of passage are bleak. At first, President Trump voiced his support for this short-term fix, as it will provide Republicans the time they need to pass a permanent ACA repeal and replace option. He then announced he could not support a bill that bails out insurers with subsidies. It is unclear if he will be a champion or a detractor of this bill. Many democrats, including Minority leader Chuck Schumer, are receptive to the legislation. Republicans in both chambers are far more critical and have publicly denounced the bill. Republicans oppose fixing the ACA, even in the short-term, and do not relish another healthcare fight. The GOP may be this bill’s biggest hurdle.

In addition, a large impediment to enactment is the busy Congressional Calendar. Congress is only in session for less than 25 more days in 2017 days and still needs to pass the debt limit, defense authorization, tax reform and funding essential programs. Senate Majority Leader McConnell has announced that the Senate will work longer weeks for the remainder of the year, including Fridays and even some weekends, to ensure they are able to vote on all the remaining legislative priorities.

As Congress considers this bill, Alegeus will continue to provide updates on the bill’s provisions and Congressional support.

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