A Compromise on Obamacare Is Still Practically Impossible

Last week, President Donald Trump lobbed yet another grenade at the Affordable Care Act (ACA), cutting off cost-sharing reduction (CSR) payments, the reimbursements the federal government gives to insurers for offering discounts to some 6 million low-income individuals on ACA marketplaces plans. Uncertainty over these payments—which total around $7 billion this year and have challenged in court by Republicans—was the last major obstacle to the stabilization of ACA plan premium rates. Without them, the nonpartisan Congressional Budget Office predicts an average 20 to 25 percent premium hike for many consumers in the next few years, drops in nationwide coverage rates, and, since the government will have to increase subsidies to consumers as a result, a $200 billion spike in the national deficit over the next decade.

It seems obvious that this will harm voters, including many in areas that supported Trump. And voters are likely to lay the blame for that squarely at Republicans' feet. If there was a silver lining to this, it was that some analysts figured that political reality could push Republicans to agree to a bipartisan fix that would restore these payments. Even Trump suggested that he ended the reimbursements to encourage such inter-party action.

But this optimism was misplaced. "The long and short of it is," Thomas Miller, a health policy expert at the conservative American Enterprise Institute, recently told me, that "nothing's going to be moving for the next month or so" on healthcare. And it's entirely possible that Congress could fail to act to resolve the impending chaos Trump has unleashed within the year.

That would be disappointing, because there's an obvious short-term solution to the problem of the missing CSR payments. Since August, Senate Republican Lamar Alexander and Democrat Patty Murray, ranking healthcare experts in their parties, had been working on a plan to stabilize the ACA's marketplaces by securing the reliability of CSR payments. That's long seemed like a fairly safe, widely agreeable proposal. But last month's bone-headed last-ditch effort to repeal and replace the ACA derailed it. Negotiations had all but stalled out, it seemed.

Then on Tuesday, Alexander and Murray announced that they had a plan. The bill would restore and guarantee CSR payments for two years and provide $100 million for ACA outreach during the open enrollment period (which Democrats want), and in exchange, make it easier for states to develop their own alternative healthcare provision systems (within the framework of the ACA) and allow more people to sign up for catastrophic insurance plans (which Republicans want).

It seemed like a solid deal. Republicans wary of being associated with propping up the ACA could sell it as a stopgap, buying time to overhaul the system. Twelve more moderate GOP senators (including Alexander) were, as of Thursday, onboard as cosponsors, and all 48 Democrats seemed likely to support it, meaning it had the 60 votes needed to get out of the upper chamber.

But within days, said Miller, "the initial momentum or whatever optimism and enthusiasm there was for this" plan, for "putting this together, has certainly been dented and stalled."

A lot of that—surprise, surprise—comes down to Trump. Alexander and others claim that, over the weekend, the president was supportive of their plan, although others in the White House claimed Trump would require much more concessions from Democrats to accept a law restoring CSR payments. Then on Monday Trump declared the ACA, which the Alexander-Murray plan would rescue, "dead." On Tuesday, he openly supported the Murray-Alexander negotiations, then moved away from them. On Wednesday, he expressly disavowed their proposal, a stance the White House officially confirmed, without guaranteeing a veto. Then on Thursday, he was back to tacitly supporting it.

"Given his latest vacillations and claims unrelated to fact," said Mark Peterson, a UCLA healthcare expert, "it is fair to conclude, as many have long ago, that President Trump has no knowledge of health policy and… what the bipartisan compromise would or would not do, and in general, how health insurance markets in the US work."

Unfortunately, Peterson added, this means he cannot lead his party on healthcare legislation, or provide legislators with a consistent set of criteria or positions. That leadership is essential to moving this bipartisan plan ahead; Senate Majority Mitch McConnell does not want to open a vote on another healthcare measure if Trump might veto it down at the last minute.

"You don't know from day-to-day which version of the president is going to be speaking," said Mitchell. "Everybody retreats to their corner in the midst of that," refusing to take risks.

Even without Trump, the Alexander-Murray solution may have run into trouble. A slew of House Republicans oppose it either on the belief that it doesn't give them enough of a win or because they think they ought to just let the ACA die. The proposal could pass in the House, Peterson believes, but only if Speaker Paul Ryan allows a vote—which he seems unlikely to do as long as the majority of his own caucus opposes it.

In theory, the urgency of preventing harm to constituents could motivate many Republicans to just support the compromise. But while voter pain is inevitable under the new status quo, it isn't imminent. Most consumers won't feel it during the 2018 rate cycle. Insurers are also finding wonky ways to shield their plans from the blow of the loss of CSR payments, said Peterson. "Insurers and people getting insured will be able to get something not satisfactory, but still operational" into the near future, said Miller. So "it's not absolutely essential that" Congress has "to do this, which largely means that it doesn't get done."

Murray claims Democrats have bent as far as they can when it comes to concessions, while Miller notes the GOP has little real leverage. And there are no other viable solutions on the table.

The consensus seems to be that legislators backing the Alexander-Murray proposal will play the long game, attaching it to a must-pass government-funding bill in early December. That'd make it easier for Republicans to swallow the vote, harder to put it off.

However the experts I've spoken to caution that this tactic is hardly a lock. There are so many potential bargaining chips swirling around that funding measure, and there's so little risk of an imminent catastrophe, that the plan could be abandoned come December. Or it could be altered drastically just to get something in the pipeline. Two months, Miller points out, is a long time to finagle votes, and support for the plan could vary drastically from day-to-day, week-to-week. "It's hard to tell what you'll get at the last minute," he said, "because it is the last minute."

"Everything from status quo stalemate to massive change is possible, perhaps of comparable odds," said Peterson. "The end result will be determined at the narrow margin by a few members of Congress."

Congress seems content to keep squabbling about healthcare much like it has all year long, convincing itself that the fires from Trump's impetuous and harmful actions will contain themselves indefinitely. In other words, legislators are poised to throw away perhaps their best chance to act substantively and beneficially on healthcare this year. But are we really surprised by that at this point in the year?

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