Omnibus, Poison Pills, and a Third Government Shutdown?
This week, Congress is negotiating the last pieces of an omnibus spending package to fund the government through the end of the fiscal year. Current stopgap funding expires on March 23. Originally slated for a House vote this week, the timeline has been pushed to early next week. While most of the spending decisions have been finalized, big questions remain over more than a hundred controversial policy changes that Republicans hope to tie the bill. The package is likely one of the last big, must-pass bills Congress will take up before the election, making it the last chance for members of Congress to win legislative victories that they can take home.
Anti-abortion conservatives, in particular, are clamoring for a win now that Republicans have given up on attempting a third reconciliation package, which would have let them once again try to force through attacks on Planned Parenthood and other abortion providers with just 50 senators. The omnibus will require 60 votes to overcome a filibuster in the Senate but hardliners hope that Democrats don’t have the appetite for another shutdown. They want the GOP to use the omnibus to block Planned Parenthood from accessing all federal funding, whether through Medicaid reimbursement or Title X federal family planning grants. They’re also drawing a hard line about private abortion coverage in any plan to shore up ACA marketplaces—see more below.
In 2015, during the height of the controversy over faked videos, Republicans came close to shutting down the government over Planned Parenthood but ultimately backed off. It’s unclear whether cooler heads will once again prevail, whether we’re headed for a third shutdown this year, or whether this is simply a cynical gambit to win concessions from Democrats in other areas like financial reform, environmental regulation, and dark money in elections. As congressional leadership is fond of saying, nothing is decided until everything is decided. Other “poison pill” provisions relevant to women’s health include codifying Trump’s plan to eliminate the Teen Pregnancy Prevention (TPP) Program and funding his anti-immigrant deportation force.
ACA Market Stabilization: CSR Payments
At the same time, Congress is negotiating a market stabilization package to shore up Affordable Care Act (ACA) insurance markets rocked by GOP sabotage. At stake are cost-sharing reduction (CSR) payments to insurance companies and federal funding for state-based reinsurance programs.
As I’ve noted previously, insurance companies are required by law to keep cost-sharing (e.g. co-pays, deductions, and coinsurance) artificially low for low-income enrollees in ACA marketplaces. So, for example, someone with an income of 150% of the federal poverty level (FPL) who signs up for a plan that would normally carry a $2,000 deductible might end up having no deductible at all. Then, the federal government is supposed to reimburse insurers for the difference through CSR payments.
An immediate cut-off in those payments likely would have been disastrous, with insurance companies abruptly raising premiums across the board or leaving ACA markets altogether. But because Trump spent months teasing whether or not he would block the payments, insurance markets had time to prepare in clever ways.
In 36 states (representing 85% of ACA enrollees), insurance companies working with state insurance regulators carefully increased premiums in such a way that actually lowered out-of-pocket costs for low- and moderate-income enrollees. That’s because financial assistance from the federal government is pegged to the cost of an area’s second lowest cost silver plan—even if the enrollee chooses a bronze or gold plan. When the Trump administration cut off CSR reimbursements, insurers were forced to raise premiums to compensate. But most didn’t raise premiums on every plan. Instead, many insurers increased premiums only on silver plans while keeping premiums stable in less comprehensive bronze and more comprehensive gold plans.
This so-called “silver loading” meant that the amount of financial help provided by the federal government rose a lot even while most plan costs increased only slightly. With the government paying more for premium assistance, many enrollees found themselves with free or close-to-free bronze plans or gold plans that were actually cheaper than silver plans. This is one reason why, despite the administration’s brazen attempts to sabotage the open enrollment period for 2018, enrollment stayed so high.
Reinstating CSR payments now that markets have adjusted to life without them would save the government money, but at the expense of low- and moderate-income enrollees, who will see their out-of-pocket premium costs rise. With the repeal of the individual mandate in last year’s GOP tax bill and the promotion of worthless “junk” health plans by the administration, consumers would face strong financial incentives to drop out of comprehensive ACA markets.
Republicans would like to use the savings from reinstating CSRs to fund state reinsurance programs. As the Center on Budget and Policy Priorities notes, this would mean taking financial help away from low-income enrollees to lower premiums for middle-income enrollees. (See below for an explanation of why.)
We can—and should!—fund reinsurance to lower costs for enrollees who don’t qualify for financial assistance, but we don’t need to pit low- and middle-income families against each other. We can make health insurance more affordable for everyone.
ACA Market Stabilization: Reinsurance
So what is reinsurance? Reinsurance helps buffer insurance companies against very large losses—like those associated with an unusually sick and expensive pool of enrollees. Without reinsurance, a company has to price the risk of really sick enrollees into higher premiums for everyone. With reinsurance, a company can keep premiums lower and be compensated if claims rise above a certain level.
The ACA established a transitional reinsurance program between 2014 and 2016 to help insurers keep premiums stable while they figured out how to set prices in the new ACA marketplaces. The program worked, significantly stabilizing premiums during that period, and its dissolution in 2017 contributed to the premium hikes that year. The new proposal would create a fund for states to tap to build their own reinsurance programs.
(Note that reinsurance, which helps offset the cost of particularly sick enrollees, is different from a high-risk pool, which would remove sick enrollees from the general risk-sharing pool and segregate them into an expensive pool made up only of other sick people. With reinsurance, sick enrollees stay in the same general risk pool, with the same comprehensive health insurance options. While segregated high-risk pools have historically resulted in long waiting lists and foregone care, reinsurance funding has a successful track record.)
Because subsidized enrollees—i.e. those who are eligible for financial help from the government based on their income—are largely buffered from rising premiums, reinsurance is most important for unsubsidized and under-subsidized enrollees—those who get little or no assistance. Keeping premiums low for this group is all the more important with the administration proposing cheap, junk alternatives. But, it shouldn’t come at the expense of increasing costs for less-well-off enrollees. In this debate, a good package is best, but no package would be better than a bad one.
Abortion Coverage, Again
“If I want to kill something if I’m a Republican I throw abortion on it,” a different insurance official added. “They’re doing this because conservative groups are mad they’re propping up Obamacare.”
Meanwhile, the entire debate could hinge on abortion rights. Under the ACA’s Nelson amendment, health plans subsidized by the federal government are allowed to cover abortion care as long as the individual’s own premium payments, not federal dollars, cover that part of the plan.
Republicans are pushing for harsh new restrictions on private abortion coverage that would constitute an effective ban on private coverage of abortion in ACA marketplaces, trying to impose the Stupak amendment that they tried and failed to add to the ACA originally. Under the GOP proposal, no plans accessing CSR support and no plans backstopped by reinsurance could cover abortion, no matter who pays for the actual premium costs associated with abortion care. The likely net effect would be to discourage private abortion coverage in any ACA plan.
The bottom line: The ACA is already complying with Hyde (through the Nelson Amendment), but Republicans are trying to impose even more extreme and harmful restrictions on private coverage of abortion care.
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