3 Obstacles That Could Rattle Obamacare Reform

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Robert Donachie Capitol Hill and Health Care Reporter
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As Republicans continue to push health care reform through the Senate, there are three obstacles lawmakers face in the coming week that could seriously derail their efforts.

1) House v. Price

The U.S. District Court of Appeals for the District of Columbia is scheduled to hear from President Donald Trump’s administration and House leadership Monday in the ongoing battle over funding Obamacare cost-sharing reductions (CSRs).

Under the leadership of former Speaker John Boehner, the House filed suit against the Obama administration in 2014, claiming it was illegally reimbursing marketplace insurers for a little known feature of Obamacare: CSRs.

Obamacare requires insurers to provide CSRs to low and moderate income individuals who participate in the exchanges. To make consumers put more “skin in the game,” Obamacare effectively raised deductibles to levels that are tough for many Americans to meet without some financial support — a consequence of bringing millions of new consumers into the health insurance marketplace. CSRs were instituted to help insurers with the costs of the deductibles patients can’t otherwise meet.

Boehner believed that under Obamacare, CSRs require an annual appropriation from Congress. Essentially, lawmakers should consider, debate and agree upon the program’s funding each year during budget hearings.

The House argued that because Congress had never explicitly appropriated the funds for those payments, the administration’s actions were unconstitutional. After nearly two years of deliberation, Senior Judge of the U.S. District Court for the District of Columbia Rosemary M. Collyer concluded the House’s claim had legal standing and allowed the case move forward May 12, 2016.

The Obama administration then appealed the decision. The case remains open, with no definitive ruling. Republicans have pushed back the court date twice. In February, the court approved a hold until May 22 that Trump and Ryan sought. (RELATED: The Potentially ‘Unconstitutional’ Feature Of Obamacare Everyone Is Ignoring)

If Trump and Ryan forgo a continuance, they will face a difficult decision — pursue or withdraw the Obama administration’s appeal.

If the pair decide to forward the appeal and the 2016 ruling is upheld, they would be one step closer to their goal of dismantling Obamacare.

The president reportedly told aides in the Oval Office Tuesday that he is willing to cut funding for CSRs and Obamacare subsidies all together. Trump believes he has nothing to lose in gutting them. He reportedly said that if lawmakers want to keep paying CSRs, they can find a way.

If Trump moves forward with his comments and withdraws from the appeal, he could bring a host of economic and political problems on the new administration. The decision to let Obamacare “implode,” end funding CSRs and withdrawing from the appeal, will effectively leave insurers with up to $7 billion in bad debt and consumers with backbreaking premiums.

As it stands, some $7 billion is allocated to CSRs this year and another $10 billion is slated for 2018.

If Trump and the Republican leadership don’t fund the program for 2017, they leave insurers, who are already paying out billions in CSRs, without any chance of reimbursement from the federal government.

After Trump’s comments Tuesday, major health care organizations and groups that represent the industry, along with attorneys general from 15 states and the District of Columbia, sent a letter to Senate lawmakers warning of massive losses in insurance coverage if the government stops funding Obamacare subsidies.

“We urge Congress to take action now to guarantee a steady stream of CSR funding through 2018,” America’s Health Insurance Plans (AHIP) wrote in the letter to senators released to The Daily Caller News Foundation. Continuing Obamacare subsidy payments would eliminate the “single most destabilizing factor causing double-digit premium increases in 2018,” the health care groups wrote.

2) Revised CBO Score of The American Health Care Act (AHCA)

The Congressional Budget Office (CBO) projected in March that 24 million Americans would lose health insurance if Congress passed AHCA, with a large portion of the loss stemming from Medicaid consumers. The CBO estimated the legislation would cut $839 billion from Medicaid over the next decade.

The Republican health care plan, with the addition of the MacArthur amendment, lets states opt-out of certain provisions of Obamacare through waivers. Critics of the House bill argue that if states were able to obtain a waiver, millions of Americans who receive health insurance through Medicaid, especially those who obtained it through Obamacare’s Medicaid expansion program, would lose coverage.

Some 20 Republican senators are in states that chose to expand Medicaid, and many are concerned about the number of recipients who would lose coverage under AHCA.

The revised CBO score of the plan, which passed the House in early May, is scheduled for release Wednesday. Early predictions are that tens of millions will still likely lose coverage under the Republican bill.

3) Senate Debates Over Obamacare Medicaid Expansion

A handful of conservative senators are pushing for steep cuts to Medicaid but face a formidable obstacle from Republican senators in states that participated in the expansion program.

The crux of the debate is rather straightforward.

Conservative senators are seeking an immediate roll back of the federal money granted to Medicaid expansion. The senators argue that serious cuts to the program’s funding would force states to make prudent decisions regarding how they choose to spend Medicare funds. At the same time, they fear retribution from constituents if they vote in favor of gutting Medicaid.

Shepherding Republicans through the debate are GOP Sens. Ted Cruz of Texas and Rob Portman of Ohio. Both lawmakers think the House bill was a “positive step” towards repealing and replacing Obamacare but acknowledge both moderate senators and critics’ anxieties.

Cruz says that a “number of senators,” including himself, are concerned about the potential loss to Medicaid recipients under AHCA. Portman claims he “couldn’t support the House bill,” because he “didn’t believe it provided adequate coverage for people who are currently being helped by expanded Medicaid.”

Democrats in the Senate are sure to oppose any Republican proposal to repeal and replace Obamacare, as they feel a duty to support Obama’s hallmark legislative achievement. A slew of negative coverage surrounding AHCA and a CBO score that predicts massive losses in coverage have Democrats angling to use Obamacare repeal as a chief campaign issue in the upcoming 2018 mid-term elections.

With Democrats united in opposition, Republican lawmakers will have to reach a consensus to pass the bill in the Senate — a task that is proving more difficult by the day. If the Senate passes legislation that guts Medicaid even more than the House proposal, Republican senators in expansion states could face a lot of heat in the 2020 election cycle.

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