Health Subsidies for Low Earners Will Continue Through 2017, G.O.P. Says

March 31, 2017  |   News and Events   |     |   Comments Off on Health Subsidies for Low Earners Will Continue Through 2017, G.O.P. Says

WASHINGTON — Senior House Republicans said Thursday that they expected the federal government to continue paying billions of dollars in subsidies to health insurance companies to keep low-income people covered under the Affordable Care Act for the rest of this year — and perhaps for 2018 as well.

The decision would be a curious twist for Republicans who have spent seven years battling President Barack Obama’s health law only to fail last week to repeal it. The Republican-led House won a lawsuit accusing the Obama administration of unconstitutionally paying the insurance-company subsidies, since no law formally provided the money.

Although that decision is on appeal, President Trump could accept the ruling and stop the subsidy payments, which reduce deductibles and co-payments for seven million low-income people. If the payments stopped, insurers — deprived of billions of dollars — would flee the marketplaces, they say. The implosion that Mr. Trump has repeatedly predicted could be hastened.

But senior Republicans appear unwilling to force that outcome.

“While the lawsuit is being litigated, then the administration funds these benefits,” the House speaker, Paul D. Ryan, said Thursday. “That’s how they’ve been doing it, and I don’t see any change in that.”

The future of the cost-sharing payments has been unclear since the House, in a setback for Mr. Trump and Mr. Ryan, failed on Friday to pass a bill to repeal the 2010 health care law, a centerpiece of Mr. Obama’s legacy.

Representative Greg Walden, Republican of Oregon, who is the chairman of the Energy and Commerce Committee, said Thursday, “I will do everything I can to make sure that the cost-sharing reduction payments get made.”

“That’s an obligation we have not only to the insurers,” but also to consumers who enrolled in plans under the health care law, Mr. Walden said. “We cannot leave them high and dry.”

Mr. Walden said his preference was for Congress to appropriate the money, about $7 billion a year. That is “the best legal way to do it,” he said.

At the same time, Mr. Ryan said the House would pursue the litigation to vindicate its “power of the purse.”

“We don’t want to drop the lawsuit because we believe in the separation of powers,” Mr. Ryan said. “We believe in Congress retaining its lawmaking power.”

Judge Rosemary M. Collyer of Federal District Court in Washington ruled for the House in May, but allowed the subsidy payments to continue, pending resolution of an appeal by the Obama administration. The Trump administration has not taken a position on the appeal.

The Justice Department has strong institutional reasons for objecting to the court decision: It contends that Congress should not be able to “call upon the courts to referee a dispute” with the executive branch of the federal government.

Insurers have lost hundreds of millions of dollars on business under the Affordable Care Act and are pulling back from the public marketplaces in many states, creating a possibility that some consumers will have no options on the insurance exchanges next year.

Senators Lamar Alexander and Bob Corker, Republicans of Tennessee, introduced a bill this week to protect such consumers.

“Urgent action is needed,” Mr. Alexander said. “In the Knoxville area where I live, the one remaining insurance company on the Affordable Care Act exchange has pulled out for the year 2018. So it is a near certainty that there will be zero insurance options for Tennesseans who live there and buy their insurance on the exchange.”

The uncertainty about the intentions of the Trump administration and Congress has made insurers jittery, and Wall Street analysts are watching closely to see if insurance companies will leave more markets.

David Windley, a securities analyst at Jefferies L.L.C., said enrollment would probably plummet without the cost-sharing subsidies because so many people rely on them. If the subsidies go away, he said, “all bets are off.”

Mr. Windley, who met recently with a senior executive of Anthem, the insurance giant, told investors on Thursday that he believed that the company was “leaning toward exiting” a large percentage of the local markets where it now participates. That news was first broken by Bloomberg News.

Anthem officials refused to comment. The company has previously threatened to leave if the government does not take certain steps to stabilize the market.

A departure by Anthem, already the sole carrier in a third of the counties in states where it operates, could be a devastating blow to the market. The company, which offers plans in 14 states, is a major player, and its exit would follow the departure of other large insurers like UnitedHealth Group, Aetna and Humana.

But Anthem is not likely to make its decision lightly. Because it operates Blue Cross and Blue Shield plans, which have historically been the main insurer in many states, it has strong ties to the individual market. Still, other Blue Cross plans have left some markets, and other for-profit companies have not hesitated to leave.

“The precedent for backing away is established,” Mr. Windley said.

Mr. Ryan met on Thursday with leaders of a dozen conservative groups to map strategy for possible further efforts to repeal the Affordable Care Act.

“We told the speaker that we think we can find the votes needed to pass this bill,” Grover G. Norquist, the president of Americans for Tax Reform, said in an interview. “We are optimistic. The speaker said, ‘This is still doable, and it’s our goal to get it done while we work on tax reform on a parallel path.’”

Mr. Ryan is encouraging members of his conference to patch up their differences. But the collapse of the bill last week, torpedoed both by the conservative Freedom Caucus and by more moderate Republicans, left deep fissures in the House Republican Conference.

“We are frustrated and disappointed,” said Representative Chris Collins of New York, who supported the bill and is close to Mr. Trump. “But it’s not outright warfare.”

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