(Bloomberg) – A bipartisan deal to prop up Obamacare exchanges has “stalled out,” a top Senate Republican said Wednesday as President Donald Trump signaled his opposition.
Trump had created confusion with conflicting signals on the deal Wednesday until White House Press Secretary Sarah Sanders declared his opposition. “We need something that goes a little further to get on board,” Sanders told reporters at an afternoon press briefing. She called the deal a "good step in the right direction."
By then, John Thune of South Dakota, the Senate’s No. 3 Republican leader, had told reporters the pact had “stalled” as Senator Orrin Hatch of Utah, the chairman of the Finance Committee, said he opposed the deal. In the House, Speaker Paul Ryan also had signaled his opposition.
Shares of health insurers were lower on the remarks from Thune and Hatch. UnitedHealth Group Inc. was up 0.8% at 3:14 p.m. in New York after earlier rising as much as 1.9%. Centene Corp. fell 0.17%.
Trump had personally encouraged Republican Senator Lamar Alexander of Tennessee to reach a deal with Democrat Patty Murray of Washington, but as soon as the deal was announced Tuesday, he started sending conflicting signals about his stance.
Trump on Wednesday morning tweeted: “I am supportive of Lamar as a person & also of the process, but I can never support bailing out ins co’s who have made a fortune w/ O’Care.” He didn’t specifically say whether he opposes the legislation or whether he considers it a bailout of insurers.
The president further deepened the confusion during a meeting with senators later Wednesday morning.
“Lamar Alexander’s working on it very hard from our side. And if something can happen, that’s fine,” Trump told reporters. “But I won’t do anything to enrich the insurance companies because right now the insurance companies are being enriched.”
Coming days after a decision by Trump to scrap subsidy payments to Obamacare insurers, the deal had appeared to be the only Obamacare legislation with a chance of passing Congress this year. It could help stem a flight by major insurers out of the individual insurance market in many states, with Americans due to begin signing up for 2018 coverage in two weeks.
But even though a number of Republicans are eager to prevent a collapse of the individual health insurance market, opposition from Trump would likely doom the measure.
Trump has appeared to try to straddle the divide in his party on Obamacare, both encouraging Alexander to reach a deal with Murray and reveling in dismantling the Affordable Care Act. Alexander said Trump pushed him in phone calls last week to reach a short-term deal to stabilize the Obamacare exchanges. But the president also gloated on Oct. 14 after shares of health insurers fell following his order to end payments to help cover the cost of policies for low-income consumers.
“Health Insurance stocks, which have gone through the roof during the ObamaCare years, plunged yesterday after I ended their Dems windfall!” he said on Twitter.
Alexander told reporters Wednesday he agrees with the president that the legislation shouldn’t enrich insurance companies and that the measure has “strong language” to prevent that. “My feeling on this is one way or another by the end of the year it will become law,” he said.
Trump called Alexander Wednesday morning and said he’d review the bill and see if there’s anything he wants to add, Alexander said at an Axios event. Senators planned to introduce the bill on Thursday, Alexander said, who also said he is open to changes suggested by the White House.
‘Limited first step’
Alexander late Tuesday sought to assuage Republicans who may be wary of taking the limited action on a health program they campaigned to end altogether. On the Senate floor, he said the plan should be seen as an incremental move that can be followed later with other actions.
“Once we complete this limited first step we can take a second and a third step. I want to undersell this proposal instead of oversell it,” he said on the Senate floor. “It has significant advantages. But it is only a limited first step.”
The two-year deal would allow crucial subsidies to health insurers to start flowing again, potentially lowering insurance premiums for those in the program next year.
The package would give states new flexibility on how their Affordable Care Act markets are run. It will also encourage states to meld their markets together, and let more people buy low-cost, limited-coverage plans.
The flexibility would allow states to implement Obamacare in a way that provides customers coverage similar in affordability to plans under the current law. At the same time, states can’t degrade consumer protections Obamacare requires plans to offer, such as maternity care, mental health services and a ban on discrimination against pre-existing conditions, Murray said on the Senate floor.
The agreement also restores some of the money the Trump administration slashed for outreach regarding open enrollment in Obamacare plans.
“We compromised on the outreach funding and have agreed we will spend about twice as much or more than President Trump wanted to spend but we will do most of that in grants to the states,” Alexander said.
The administration had cut advertising spending by 90% down to $10 million for the sign-up period starting at the beginning of November. It also reduced payments by 39 percent to groups that help people choose among their health insurance options.
Perhaps the chief obstacle to the deal being enacted is the wariness of some key Republicans to embrace it.
Resistance in House
Last week, Ryan of Wisconsin praised Trump for planning to end the payments and he has never encouraged any short-term fix to stabilize the exchanges.
"The speaker does not see anything that changes his view that the Senate should keep its focus on repeal and replace of Obamacare," Ryan spokesman Doug Andres said Wednesday.
Representative Mark Walker, who heads the conservative Republican Study Committee, also said GOP lawmakers should be focused on repealing Obamacare, not propping it up.
“This bailout is unacceptable,” the North Carolina lawmaker said in a tweet from the group’s account.
McConnell didn’t commit to putting the compromise plan on the Senate floor after a closed-door meeting Tuesday of all Republicans in the chamber, where Alexander summarized the accord.
“We haven’t had a chance to think about the way forward yet,” McConnell told reporters.
Senate Minority Leader Chuck Schumer of New York said the Alexander-Murray package got “broad support” during Senate Democrats’ weekly lunch at the Capitol.
“We think it’s a good solution,” he said. “I think there’s a consensus that we need short-term stability.”
On Wednesday, Schumer expressed exasperation over Trump’s Wednesday tweet, saying the president has “no idea” what the agreement does, including its requirement that subsidies go to consumers and not insurers. He said Trump’s shifting positions make it all but impossible to strike accords on key policies.
'Zigging and zagging'
The president keeps zigging and zagging so it’s impossible to govern,” Schumer said. “Our only hope is that maybe tomorrow he’ll be for this again.”
The health-insurance subsidies, called cost-sharing reduction payments or CSRs, have been a major factor in the increased premiums plans say they’ll charge next year. The subsidies help lower-income people with co-pays and other costs they face when they see a doctor or pick up a prescription.
A federal court ruled the CSR payments improper because of how the 2010 law was written, and the matter is currently before an appeals court. The Trump administration announced last week that it was cutting them off, leaving health insurers and hospitals wondering what would happen for the rest of this year and for 2018.
Funding the cost-sharing subsidies would spare insurers more than $1 billion in financial losses this year, and could let them lower premiums for 2018. But with rates already set for 2018, it’s not clear whether insurers and state regulators would be able to bring premiums down immediately.