The president may face pushback from his own party.
SAUL LOEB/AFP/Getty Images
By Sy Mukherjee
August 1, 2017

The Senate GOP faced a stunning setback last week when a trio of Republican Senators bucked Majority Leader Mitch McConnell and party leadership to kill a “skinny repeal” of Obamacare. It was the third GOP health care bill to fail in nearly as many days and left many wondering: What’s next for health reform?

President Donald Trump promptly made his position known, threatening to discontinue certain Obamacare payments to insurance companies that help reduce medical costs for low-income Americans. Trump equated these to an insurer “bailout” (and apparently questioned the future of health care provided to members of Congress.)

But a growing number of Republicans appear eager to challenge Trump’s Obamacare position following last week’s defeats. In fact, several prominent GOP members are urging the Trump administration to keep making the insurer payments and are launching bipartisan efforts to shore up the health law’s marketplaces with the help of Democrats.

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For some background: The insurer payments that Trump describes as “bailouts” are actually way to keep insurers in the marketplaces and prevent premium hikes. Obamacare contained cost-reduction provisions to lower the deductibles and out-of-pocket costs paid by certain Americans making up to 1.5 times the federal poverty level (FPL)—specifically, those who buy a mid-level “Silver” plan. For some families, these so-called cost-sharing reductions can bring deductibles all the way down to zero.

The thing is, insurance companies are required to provide this financial assistance to qualifying poor families under the law. And that means that they’d still be on the hook even if the federal cost-sharing subsidies that fund the Obamacare provision are cut off, likely forcing firms out of an unaffordable market or catalyzing high premium spikes. Multiple insurance companies have cited the Trump administration’s threats on cost-sharing subsidies as a prominent reason for fleeing Obamacare’s markets next year and asserted that planned premium spikes for next year would be lower if these payments are made.

But a parade of prominent Republican Senators including Louisiana’s Bill Cassidy, Maine’s Susan Collins, Utah’s Orrin Hatch, South Dakota’s John Thune, and, perhaps most significantly, Health, Education, Labor, and Pensions committee chair Lamar Alexander, have all come out in the past two days to urge Trump to pay the insurer subsidies at least on a short-term basis, arguing that American families would bear the consequences without the payments.

Trump may reportedly play hard ball on the issue and force Senators to take another health care vote in exchange for remitting the subsidies. But it’s unclear that there’s much of an appetite on Capitol Hill to keep focusing on health care when a purely GOP-led victory is far from assured. And Congress could theoretically take the decision on whether or not to make the payments out of Trump’s hands.

In fact, Senate Majority Whip John Cornyn of Texas admitted that the path to health reform going forward will require a bipartisan bill on Tuesday, and HELP committee chair Alexander announced committee hearings to discuss problems facing Obamacare’s individual insurance marketplaces at the beginning of September.

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