Senators reach bipartisan healthcare agreement: 8 things to know

Sens. Lamar Alexander, R-Tenn., and Patty Murray, D-Wash., went public with a bipartisan healthcare agreement Tuesday that would extend cost-sharing reduction payments through 2019 and give states greater flexibility in using ACA innovation waivers, or 1332s, to shape their health insurance marketplaces.

Here are eight things to know about the agreement and how it was received by Congressional leadership and the Trump administration.

1. The agreement, the details of which are still minimal, is seen by the senators and President Donald Trump as a two-year solution to uphold the ACA until Congress reaches a long-term solution. "This takes care of the next two years," Mr. Alexander said. "After that, we can have a full-fledged debate on where we go long-term on healthcare."

2. There is no assurance the agreement will make it to the Senate floor. Mr. Alexander and Ms. Murray are now trying to round up co-sponsors for the agreement, after which they will hand the legislation over to Senate Majority Leader Mitch McConnell, R-Ky., and Minority Leader Chuck Schumer, D-N.Y., who will determine how or whether to bring it to the floor for a vote. The legislation comes up against a dense docket, as the Senate is set to address a defense authorization bill and tax reform legislation, according to Politico.

3. What's in the agreement? Here are a few key components, as confirmed by Senate aides to news outlets. The official legislative language has not yet been released.

4. A critical component of the deal is its extension to ACA cost-sharing reduction subsidies through 2019, which would counter President Trump's decision last week to immediately halt supplementary payments to insurers for the discounts they provide to eligible individuals to control their out-of-pocket costs. These eligible enrollees buy coverage under the ACA exchanges and have incomes between 100-250 percent of the federal poverty level.

5. While this move would terminate one form of subsidy, the other form under the ACA — premium tax credits — would remain. Premium tax credits control the amount an individual or family must spend on their monthly premium payments for health insurance, and eligible enrollees can receive their tax credit in advance or claim it when they file their taxes. In August, the Congressional Budget Office issued a projection that terminating CSR payments would increase premiums by 20 percent in 2018. This would consequentially increase premium tax credts, thus increasing the federal deficit by $194 billion through 2026. This is meaningful in light of the deal announced Tuesday: If the savings restored by extending CSRs for two years equates to the cost of terminating CSRs, the bipartisan deal reached by Mr. Alexander and Ms. Murray could be largely self-funded, according to Health Affairs.

6. The other most important component of the deal is its simplification to the process states must complete to obtain state innovation waivers under Section 1332 of the ACA. This would be a win for the Trump administration, which endorses states' use of waivers to better shape their respective health insurance marketplaces. The application requirements for 1332 waivers currently include explicit legislative approval, public comment, detailed actuarial and economic analyses and a lengthy review process, according to Health Affairs. Of the six states that have submitted 1332 waivers, only one — Hawaii — received approval, according to Kaiser Family Foundation. The stabilization bill would shorten the review process for waiver applications and allow for an expedited review of waivers for states in emergency circumstances or those using waiver proposals already approved in other states.

7. The deal also would give states more flexibility in how they design their Section 1332 waivers. Language in the draft bill allows states to offer plans of "comparable affordability" to those offered on the individual exchanges, while maintaining protections for low-income Americans and those with serious health conditions, accoridng to Politico. The length of waivers would be extended beyond five years, and they would be assessed for budget neutrality over that entire period, rather than year by year. 

8. Additional changes proposed by Mr. Alexander and Ms. Murray would extend the availability of catastrophic health plans to Americans over age 30, according to Politico, and would call for regulations on the sale of health insurance across state lines. Interstate health compacts were included in a provision under the ACA, but the Obama administration did not issue regulations on it, according to a summary of the deal.


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