WASHINGTON — The future of the bipartisan bill to stabilize health insurance markets remained uncertain after President Trump sent mixed signals about the health reform legislation.
GOP senators who met with Trump late last month said he had withheld his backing for the bill, which would temporarily restore insurance subsidies that the president had blocked with an executive order. The payments reduce out-of-pocket costs for low-income people getting insurance.
Earlier in the month the president endorsed the bipartisan proposal, saying its crafters, Sens. Lamar Alexander (R., Tenn.) and Patty Murray (D., Wash.), were “fairly close to a short-term solution.” But he subsequently said, “I continue to believe Congress must find a solution to the Obamacare mess, instead of providing bailouts to insurance companies.”
Alexander pointed out that the nonpartisan Congressional Budget Office found that the legislation would benefit taxpayers and consumers — not insurance companies. “The president has said repeatedly, Sen. Murray has said repeatedly, I have said repeatedly the Alexander-Murray short-term, bipartisan plan to reduce premiums and avoid chaos must not bailout insurance companies,” Alexander said. “We’ve written language to make sure it does not. Now the Congressional Budget Office says it does not.”
He also said the bill’s future rested with the Trump administration. “It’s up to the White House to take the suggestions, work with Senate and House leaders … and decide what the president would like to do,” he told CNN.
In a joint statement, Alexander and Murray noted that “an unusually large group of cosponsors — 12 Republican and 12 Democratic United States senators — released this legislation, which was based on four hearings in the Senate’s health committee plus four meetings for senators not on the committee. All in all, 60 senators participated in the process, and the sooner Congress and the president act, the better.”
White House press secretary Sarah Sanders called the legislation “a good step in the right direction,” while adding that the administration needed “something to go a little bit further to get on board.”
The administration had a victory in court when a federal judge ruled that the government does not have to immediately reinstate the subsidies. Eighteen state attorneys general, led by California Democrat Xavier Becerra, had contended that the monthly payments to insurers were mandated under the Affordable Care Act and that cutting them off would hurt consumers. U.S. District Judge Vince Chhabria in San Francisco said the White House had the “stronger legal argument” and the emergency measure sought by the states would be “counterproductive” since they had devised alternatives.
The states had asked him to issue a preliminary injunction requiring the government to maintain the payments pending a trial, which will take months. The administration says the government cannot legally continue the funding without formal authorization from Congress.
Chhabria, who was appointed by President Obama, said that with California and other states having protected consumers from the loss of subsidies there was no immediate threat of higher insurance costs.
The states limited the number of plans for which insurers could boost premiums to offset the lost subsidies and provided tax credits for health insurance purchases, the judge noted.
“The state of California is standing on the courthouse steps denouncing the president for taking away people’s health care, when the truth is that California has come up with a solution to that issue that is going to result in better health care for a lot of people,” he said.
Gregory Brown, who represented the state, said the subsidy pullback was creating “uncertainty and chaos” that could result in insurers opting out of the ACA marketplaces.
California’s insurance marketplace had reported that nearly four-fifths of consumers will see their premiums stay the same or decrease, since the amount of financial help they receive will also rise. It said three in four consumers in the state who are eligible for assistance will be able to purchase low-cost bronze health plans next year for less than $10 a month.
Many other states have taken comparable steps to avoid hurting consumers, the judge said.
The ruling notwithstanding, Obamacare showed its staying power when the Internal Revenue Service cautioned tax professionals that it will reject 2017 income tax returns that do not comply with the requirement for ACA filers to disclose their health insurance status.
“Taxpayers remain obligated to follow the law and pay what they may owe at the point of filing,” the IRS said. “The IRS will not accept electronically filed tax returns where the taxpayer does not address the health coverage requirements of the Affordable Care Act.”
The ACA mandates that most people pay a tax penalty if they lack health insurance — a controversial stipulation known as the individual mandate. The penalty is the higher of 2.5% of adjusted gross household income or $695 per adult and $347.50 per child under 18.
The IRS decree appeared to contradict Trump’s first executive order, signed the day he was inaugurated, telling a number of federal agencies to limit the reach of Obamacare. The law’s supporters say the individual mandate is essential to its viability by ensuring that young, healthy people buy insurance and offset the cost of covering the sick and elderly.
The action should “put to rest speculation that the IRS is no longer enforcing the individual mandate,” and boost compliance, said Timothy Jost, an emeritus law professor at Washington and Lee University.
For their part, Democrats introduced legislation to let states to set up a public option for health insurance.
The bill, which is being spearheaded by Sen. Brian Schatz (D., Hawaii) and Rep. Ben Ray Lujan (D., N.M.), has 17 cosponsors in the Senate. “Our objective should be to have a competition of ideas. … I think it’s a golden age in terms of policy ideas when it comes to Democrats and health care,” said Schatz.