Congress under pressure to lower skyrocketing health care costs

It took 43 days for Congress to reopen the government, and lawmakers will now try to negotiate a health care deal in less time than that.

Skepticism abounds about the potential for a bipartisan deal on legislation to lower health care costs, but a deadline is driving the negotiations.

Senate Republicans promised a vote on the health care issue in mid-December after enough Democrats threw in the towel on the shutdown and their demand to stop enhanced Obamacare subsidies from expiring at year’s end.

Democrats are focused on using taxpayer money to subsidize insurance premiums for 22 million Americans with Obamacare. Otherwise, their premiums will double on average when the COVID-19 enhanced subsidies expire Dec. 31, as scheduled.

“We have to push forward to address this health care crisis, and the biggest way to do that is to make sure that we have an extension of the ACA tax credits,” said Rep. Frank Pallone of New Jersey, the top Democrat on the House Energy and Commerce Committee, which shares jurisdiction over health care with the House Ways and Means Committee.

Republicans argue that Obamacare is broken, and they don’t want to keep sending subsidies directly to insurance companies. They are exploring ideas for redirecting those taxpayer-financed dollars to consumers to choose their own health care plans.

“I think it is important that Americans understand that we’re fighting for all 347 million of them, not just 24 million,” House Ways and Means Committee Chairman Jason Smith, Missouri Republican, told The Washington Times.

The reference to 24 million is the number of people who buy insurance through the federal and state-based Obamacare exchanges. Roughly 22 million of those benefit from the Democrats’ COVID-19 expansion of the premium tax credits, which cap out-of-pocket costs for consumers.

The 2021 expansion allowed people earning above 400% of the federal poverty level, currently $62,600 for a single person or $128,600 for a family of four, to qualify for the subsidies.

It also reduced the maximum out-of-pocket contributions for people of all income levels. Those costs range from 0% to 8.5% of household income under the enhanced subsidies.

A return to the base subsidies would raise those contributions 2.1% to 9.96% for people earning up to 400% of the federal poverty level. Those above the line would lose access to the government-set limit.

Republicans are largely keen to let that happen, but some are interested in extending the enhanced subsidies with an income cap and guardrails to protect against fraud.

Democrats say they are open to adjustments along those lines as they search for a compromise that can pass both chambers.

“We don’t need another pyrrhic victory,” said Rep. Donald Beyer, a Virginia Democrat on the tax-writing Ways and Means Committee.

Negotiations are likely to be led in the Senate, where a vote is promised, but senators have yet to announce any bipartisan plans.

Meanwhile, a handful of bipartisan proposals have been floated in the House.

Reps. Brian Fitzpatrick, Pennsylvania Republican, and Thomas R. Suozzi, New York Democrat, co-chairs of the bipartisan House Problem Solvers Caucus, proposed a framework for legislation to extend Obamacare subsidies for two years.

The proposal, backed by a few of their caucus members, includes guardrails to prevent improper payments and begins phasing out subsidies for individuals with annual incomes exceeding $200,000.

A separate bipartisan bill, introduced by two representatives from California, Democrat Sam Liccardo and Republican Kevin Kiley, would provide a two-year extension with an income cap at 600% of the federal poverty level, currently $93,900 for a single person or $192,900 for a family of four.

Rep. Don Bacon of Nebraska, one of the Republicans supporting both proposals, said modifying and extending the subsidies is the easiest way to prevent Obamacare consumers from paying more than double.

A temporary extension, he said, would also buy lawmakers more time to look at longer-term solutions to lower health care costs.

Mr. Bacon’s idea is to separate higher-risk individuals from the broader health insurance pool, which would lower costs for those remaining, and subsidize coverage for the high-risk pool. He acknowledged that significant overhauls like that can’t be implemented quickly enough to allow the enhanced Obamacare subsidies to expire.

“You’re not going to get a massive reform done by Dec. 31, so I think some kind of extension is going to happen,” Mr. Bacon said.

The bipartisan interest in a short-term solution may not be enough to push past the widespread Republican opposition to doing anything to prop up Obamacare.

House Speaker Mike Johnson, Louisiana Republican, said the COVID-19 enhanced Obamacare subsidies are a “boondoggle to insurance companies” and Republicans “would demand a lot of reforms” if they consider an extension.

He said Republicans have “volumes” of other ideas on how to drive down health care costs and increase access to care they want to consider, and thus he can’t promise a vote on anything until that “vigorous debate” plays out.

President Trump is calling for the tens of billions of dollars the government spends each year on the Obamacare subsidies to be paid directly to consumers rather than the insurance companies.

“Our country stupidly pays them so much money with this Obamacare scandal,” he said. “So I want the money to go directly to you, the people. And you’ll go out and you’ll buy your own health insurance, and you’ll negotiate different plans, and you’ll get much better insurance, and you will be an entrepreneur for yourself.”

Although Mr. Trump’s idea would allow consumers to shop for private insurance plans in addition to plans on the public exchanges, it’s unclear whether it would do anything to change insurers’ rates.

Insurers are charging more across the board for health care coverage because of rising medical inflation and costs set by health care providers and prescription drug companies.

Senate Republicans have begun floating proposals that align with Mr. Trump’s vision.

Senate Health, Education, Labor and Pensions Committee Chairman Bill Cassidy, Louisiana Republican, is proposing pre-funded flexible spending accounts for “real-world health expenses.”

“It would actually have more flexibility than your current insurance proposal,” he said, citing covered expenses such as eyeglasses, dental care, prescription drugs, medical supplies, deductibles and co-pays.

The FSAs would not pay for insurance premiums, Mr. Cassidy said.

“This is about you spending directly for your health care costs, not about enriching insurance companies,” he said. “It would pay for the care that families actually use.”

Sen. Rick Scott, Florida Republican, is drafting legislation that would provide consumers with money through a health savings account.

“We ought to give people the opportunity to buy whatever plan they want and get people the money directly,” he told The Times.

Mr. Beyer said HSAs “aren’t a bad idea, except that so far, they’ve been appealing to a very limited number of people.”

He said that if the Republicans’ goal is for consumers to spend the HSA money on health insurance coverage, it wouldn’t stop insurance companies from profiting from that.

“It’s still going to go right to the insurance company,” Mr. Beyer said. “So it’s not a reasonable solution.”

Sen. Jeanne Shaheen, a New Hampshire Democrat who has been leading bipartisan discussions on the Obamacare subsidies, said negotiators will have room to discuss how to prevent insurance companies from profiting from any government assistance designed for consumers.

“I think there are a number of areas that we can agree on, and that’s part of what will be discussed,” she said.

Other Democrats are skeptical about Republicans’ intentions.

“Let me just remind you, these are the folks who, when Trump was elected the first time, spent years saying they were going to improve on the ACA and replace it,” said Sen. Christopher Coons, Delaware Democrat. “And they never did. They never came out with a credible plan.”