Health-Insurance Premiums Loom as Election Issue

Health-insurance premiums are likely to jump right before the November elections, a result of Congress’s omission of federal money to shore up insurance exchanges from its new spending package.

Lawmakers from both parties had pushed to include the funding in the $1.3 trillion spending law signed Friday, but they couldn’t agree on details. A battle has already begun over how to cast the blame for the expected rate increases.

Democrats blame GOP lawmakers for the failure of negotiations over the funding, saying Republican leaders demanded the inclusion of abortion restrictions they knew would be unacceptable to Democrats. Republicans say that they negotiated in good faith and that Democrats rejected reasonable rules on abortion.

The finger-pointing comes as health care is expected to be a top issue in this year’s midterm elections. Both parties face political risks, although polls have so far shown voters are more likely to hold Republicans responsible for high costs. In a Wall Street Journal/NBC News poll last summer, when GOP lawmakers were pushing to repeal the Obama-era Affordable Care Act, 43% of voters said Democrats would do a better job handling health care and 26% said Republicans.

In a recent special election in Pennsylvania, health care was ranked as a top issue by 52% of voters, according to a survey by Public Policy Polling, a firm aligned with Democrats. In that race, Republican Rick Saccone lost to Democrat Conor Lamb in a district Republican President Donald Trump carried by almost 20 points.

Health-insurance premiums have been rising sharply for people who buy insurance on their own, rather than getting it through work or other programs, and dwindling participation by insurers has left such consumers with fewer choices.

Some lawmakers from both parties had pushed to include in the spending bill measures aimed at stabilizing the individual health-insurance market, especially restoring payments to insurers that offset the cost of subsidies they are required under the ACA to provide to some low-income consumers. Mr. Trump ended the payments last year, saying they were illegal because the money hadn’t been appropriated by Congress. The proposals also sought to give states money to help with expensive insurance claims.

Omitting the measures from the spending bill dims the prospects for such legislation this year. While some lawmakers are likely to push for separate legislation, such a measure is highly unlikely to pass amid rifts in Congress over whether to help support the health law as well as on the abortion restrictions.

That deals a blow to insurers who must soon determine what rates to charge next year. Without the payments, insurers may raise premiums or curtail participation in the ACA exchanges. The Congressional Budget Office estimates that gross premiums for a popular middle-priced plan offered through the insurance exchanges are, on average, about 10% higher this year than they would have been if the subsidies to insurers were funded, a figure set to grow to 20% by 2021. The CBO also expects premiums to rise as a result of the repeal of the requirement that most people have coverage or pay a penalty, something that might encourage healthier people to forgo insurance.

Democrats blame the expected premium increases on an ongoing push by the Trump administration and congressional Republicans to dismantle the ACA. Increases in health-care costs “have been exacerbated by the Trump administration’s efforts to sabotage the Affordable Care Act and destabilize health-care insurance markets,” said Sen. Elizabeth Warren (D., Mass.).

Republicans fault the ACA and its regulations for stifling competition and driving up premiums, saying the GOP cannot be blamed for the problems with a law the party has forcefully opposed for years.

Sen. Lamar Alexander (R., Tenn.) said Democrats torpedoed the stabilization measures in the spending bill by rejecting proposals to ban the funds from going to private insurers that cover abortions. This is similar to so-called Hyde language that applies to other government programs, Mr. Alexander said.

“We’ll let the Democrats scramble and continue in their embarrassment to explain how they’re going to vote to apply the Hyde language to 100 different programs in the omnibus bill, but not to a 40% health-insurance decrease,” Mr. Alexander said, referring to one prediction of how much a stabilization bill would cut premiums.

Democrats said Republicans were trying to seize on the stabilization effort to extend abortion restrictions beyond a careful compromise enshrined in the ACA, which says insurers can cover abortions but can’t use federal funding to do so.

Health-policy experts disagree on how much a stabilization bill would have helped. Even without additional funding from Congress, they say, any higher premiums will be offset for many people by other subsidies.

Some ACA supporters even worry that a stabilization plan would backfire. By giving more money to insurers, they say, it would allow insurers to keep individuals’ premiums lower, so the size of their subsidies would be reduced.

And many House Republicans view stabilization funding as a bailout of insurers. They are concerned that if they were to pass it, they would be punished by GOP voters for shoring up the health law they promised to repeal.

Still, without the stabilization funding, many lawmakers worry they could face political blowback in the fall, when insurers announce premiums for the next year.

“It’s about what the headlines will be about premium increases in the fall,” said Larry Levitt, a senior vice president at the Kaiser Family Foundation. “The optics are real in a political sense.”

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