Healthcare Market Stabilization Bills Do NOT Bail Out Obamacare. They Rescue Consumers

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Joel White President of the Council for Affordable Health Coverage
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Across the country, health insurance markets are crippled under the high costs and onerous dictates of Obamacare. The cost for a typical Obamacare plan soared by 37 percent this year and average deductibles now sit at more than $4,000 – creating an underreported crisis of functionally uninsured Americans who may have a card to carry in their wallet, but lack true coverage because they simply cannot afford the high price of their healthcare plan.

What’s more, insurers are fleeing healthcare exchanges — too often without adequate replacements — creating dwindling competition that has led to higher costs. Just ask families in states like Alaska, Delaware, Iowa, Mississippi, and Nebraska, where there is but a single carrier offering coverage.

As a conservative, it is profoundly disappointing that Congress has been unable to, thus far, deliver better choices for consumers.

testified on the harmful effects of Obamacare before Congress in 2016. More recently, the Council for Affordable Health Coverage, where I serve as President, offered its own detailed proposals for repeal and replace of the 2010 health care law; writing that Obamacare repeal “holds great promise to correct mistakes in the law that have led to market instability and higher costs.”

But that didn’t happen. Now, with exchanges in a tailspin and costs on the rise, Republicans in Congress must move forward with solutions based on the votes they have, not the votes they wish they had.

Rational conservatives understand that it is not conservative to punish everyday Americans by intentionally exacerbating Obamacare’s damaging effects and undermining a market that millions depend on. Conservatives believe in markets, so we should enact policies that make the individual market work by stabilizing the healthcare system and throwing off the Obamacare chains.

Thankfully, a bipartisan group in Congress — led by pragmatic Republicans like Sens. Lamar Alexander (R-TN) and Susan Collins (R-ME) — is doing exactly that.

Last year, Sen. Alexander worked with Sen. Patti Murray (D-WA) to unveil the Bipartisan Health Care Stabilization Act of 2017 – dubbed “Alexander-Murray” for short. The bill, championed by President Donald Trump, would reduce the budget deficit and lower premiums — things that conservatives should be quick to support — while finally addressing Obamacare’s flawed, unfunded mandate on insurers to subsidize coverage for lower income individuals (known as cost-sharing reduction payments, or “CSRs”).

While Sen. Alexander was working on his legislation, Sen. Susan Collins formulated a complimentary bill of her own: the Lower Premiums through Reinsurance Act of 2017. That legislation, forged with Sen. Bill Nelson (D-FL), would federal funding for states to establish reinsurance programs.

Reinsurance is a backstop of sorts for insurers, giving them incentive to stay in the marketplace with the knowledge that they won’t be forced out of business by underwriting care for high-cost, very sick individuals. These are the “uninsurables” who, if the market collapses, will seek out uncompensated care at hospitals and join the ranks of Medicaid. This troublesome prospect is exactly what some liberals want to happen – because government is their solution when markets collapse. Congress should prevent that argument in the first place by creating the environment for competitive markets to thrive.

We at the Council for Affordable Health Coverage have studied Sen. Collins’ proposal closely, and found that it could reduce average premiums by 9 to 11 percent in 2019 and 2020. What’s more, the bill accomplishes that while spending less in reinsurance funding than the “Graham-Cassidy” Obamacare repeal legislation that conservatives were clamoring for a few short months ago.

Perhaps most importantly, both the Alexander and Collins bills open the door to reforms that would loosen the chains of Obamacare and allow states more autonomy over their health care decisions.

Conservatives have always believed that states are the great laboratories of democracy and that authority over insurance should be taken out of Washington and placed into their hands. Obamacare purported to allow state innovation in health care by creating so-called Section 1332 waivers, which would enable states to waive certain elements of the health care law if they could create an alternative system that met certain guardrails intended to protect consumer access.

The only problem? The arduous application process and narrow interpretation of the law created by the Obama Administration made it all but impossible for meaningful flexibility, stifling the very innovation the law pretends to support. Obamacare encourages state-based solutions on paper, but not in practice.

That is why it is significant that the Alexander-Murray and Collins-Nelson proposals includes changes to make the waiver process work for states – not against them.

Both bills would cut the federal review time for waiver applications in half, while Sen. Alexander’s proposal would allow state waivers to remain in effect longer and be sought out directly by state governors – rather than requiring the passage of legislation. Sen. Collins bill complements this by providing the funding stream to get these state-led programs off the ground and set them up for success.

These proposals could be passed jointly as part of a government funding measure in the coming months. Some conservatives will point out that this isn’t the repeal they were promised – Congress tried that, and may again – but in the interim, states should be allowed to reform their markets and achieve what Congress thus far has been unable to accomplish. It would be a welcome step away from Obamacare’s broken status quo.

The famous words of President Ronald Reagan, who made plenty of principled compromises of his own, come to mind: “Half a loaf is better than none.”

Republican opposition to Obamacare is well understood, but to sit back and watch the demise of the individual market – taking vulnerable Americans down with it – is wrong. We should build a competitive, market-based health care system but that requires us to stop the bleeding now and ensure that, when all is said and done, there is an individual market left to reform.

Republican leaders like Senator Lamar Alexander (R-TN) and Susan Collins (R-ME) have rolled up their sleeves and started the hard work of repairing Obamacare’s damage to our health care system. Conservatives of all stripes should reach out a hand and join them, starting with passage of these needed reforms.

Joel White is the President of the Council for Affordable Health Coverage. Learn more at CAHC.net.

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.