Republicans Face Looming Deadline on Health Law

A fast-approaching deadline for insurers to commit to selling health plans next year under the Affordable Care Act is pressuring Republican lawmakers to decide quickly whether to shore up the law and ease the path for insurers or continue efforts to roll it back.

Lawmakers returning to the Capitol from recess on Sept. 5 will have only 12 legislative days to decide whether to pass a bipartisan bill aimed at bolstering the ACA’s markets before insurers must commit to participating in the law’s exchanges in 2018. At the same time, a plan from Sens. Lindsey Graham (R., S.C.) and Bill Cassidy (R., La.) that would largely topple most of the ACA is gaining traction among Republicans.

The looming deadline means that Republican lawmakers who have been bogged down for months on legislation to rework most of the ACA will have little time to decide whether to pivot and instead help bolster the current health law—or, possibly, to pursue both courses.

A bipartisan plan from Sens. Lamar Alexander (R., Tenn.), chairman of the Senate’s health committee, and Patty Murray (D., Wash.), the committee’s top Democrat, would need support from senators in both parties to clear a 60-vote threshold in the Senate. Hearings are slated for the first two weeks after Congress returns.

Their proposal would likely preserve for next year billions of dollars in federal payments to insurers known as cost-sharing reduction subsidies. Insurers have said that without the payments they likely would raise premiums or stop participating on the ACA’s individual markets. In return for guaranteeing the payments next year, any bill would likely give states more flexibility on ACA implementation, a change GOP lawmakers have sought.

The pressure on Republicans has intensified after the nonpartisan Congressional Budget Office reported last week that cutting off the subsidies could spur a 20% increase in 2018 premiums for some of the exchange’s most popular, midtier priced plans. President Donald Trump has threatened to halt the payments, which compensate insurers for lowering out-of-pocket costs for some low-income consumers.

During the congressional recess, support also has grown for the plan championed by Mr. Graham, which would give states the billions of dollars spent on the ACA to create their own health-care approaches. It also would end the requirement that most people purchase insurance or pay a penalty. Conservative lawmakers in both the House and Senate see it as the most viable path toward a repeal of the ACA.

The idea, backed also by GOP Sen. Dean Heller of Nevada, could draw other Republicans away from any plan to bolster the ACA’s markets. A spokesman for Mr. Cassidy said the two bills could move on parallel tracks, with lawmakers choosing to shore up insurance markets in the short term while pursuing more sweeping changes to the law.

Some Republicans want legislation to shore up the markets and preserve the cost-sharing payments. Others, along with Mr. Trump, are eager to repeal most of the ACA. They see the subsidies as a bailout of insurers.

Concern is growing among governors, Democrats and insurance commissioners that any effort may come too late to help consumers in fragile ACA exchanges.

Though the Trump administration recently pushed back some key federal due dates, insurers are still supposed to file their 2018 premiums by Sept. 5. However, industry officials said, the more binding deadline may be Sept. 20, when states must submit completed rates to federal officials. Ultimately, insurers have until Sept. 27 to sign federal contracts to offer 2018 plans.

“There has to be a clear set of rules for 2018 for us to participate,” said David Holmberg, chief executive of Highmark Health. “We need answers. We need to know what the playing field is and who the refs are.”

Mr. Alexander said earlier this month in a statement that if Congress doesn’t act by Sept. 27, “millions of Americans with government subsidies…may find themselves with zero options for buying health insurance on the exchanges in 2018.”

If they pass a bill to stabilize the markets, Republican officials could face a backlash in the 2018 elections from conservative voters who feel GOP lawmakers reneged on their pledge to repeal the ACA.  Voters may also hold lawmakers accountable if nothing is done and premiums climb next year.

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