Battle Heats Up Over Insurance Stabilization as Abortion Gets Added Into the Mix

With the threat of another government shutdown looming next week, Sen. Lamar Alexander, R-Tennessee, formally asked his colleagues in the Senate to reinstate and expand cost sharing reductions (CSRs) in an effort to lower premiums for people who do not qualify for subsidies for insurance bought through the Affordable Care Act (ACA).

However, it remains to be seen if the effort will work, as a new fight over abortion funding threatens to derail any efforts to stabilize insurance markets.

Alexander cited a report released earlier this week from the healthcare consulting firm Oliver Wyman, which assumes that in 2019 states will start to begin to use savings from federal pass-through CMS Section 1332 waivers. Using a Section 1332 waiver, states can use the savings from lower premiums to provide additional reinsurance. Reinsurance programs allows insurers to cover its highest-cost patients without raising premiums on the whole population.

Alexander called for 3 years of CSR payments at $10 billion a year in 2019, 2020, and 2021 coupled with a reinsurance program.

He also wants states to have the ability to issue catastrophic insurance plans, which have high deductibles and lower premiums, and generally give states more flexability to design their own programs.

“We can’t let the markets falter,” he said.

The Oliver Wyman estimate said an additional 3.2 million people would be covered in the individual market, and the proposal would result in premiums that are at least 40% lower than they would have been without the proposal in place, across all ACA metal levels. In states that are not able to obtain a 1332 waiver for 2019 in time in order to receive pass-through savings, the firm estimated that premiums would fall by more than 20%.

Whether or not Republicans or Democrats will be able to get anything done by next week remains to be seen. Alexander said that if Congress is unable to act, the American people will question why Congress is even there in the first place.

“We have a couple of things to work through on ancillary issues,” he said. That was an apparent reference to the Hyde amendment, which is now a new demand by conservative Republicans in order to get a CSR bill passed.

Majority Leader Mitch McConnell gave assurances to Sen. Susan Collins, R-Maine, last year that the stabilization plan would make it into law in exchange for her vote on the tax reform bill passed in December. At that time, restrictions on abortion funding, known as the Hyde amendment, were not raised.

Thursday afternoon, Alexander’s spokesman directed reporters to a statement Alexander made in Politico Pro where he said any attempts to cement legislation is not done, after House Minority Leader Nancy Pelosi (R-California) expressed her doubts.

"Oh no, of course not," he said. "It would be a shame if we miss an opportunity to lower rates for hardworking Americans by 40%."

"I would be very surprised if suddenly after... all those years anyone is surprised by the requirement that the Hyde language be a part of any appropriations bill," Alexander said.