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Those That Shall Not Be Named: Cost Sharing Reductions

Once a nonstarter, health insurance subsidies part of year-end calculus

Speaker Paul D. Ryan once panned a measure that would restore cost-sharing reduction subsidies for health insurance companies. (Bill Clark/CQ Roll Call file photo)
Speaker Paul D. Ryan once panned a measure that would restore cost-sharing reduction subsidies for health insurance companies. (Bill Clark/CQ Roll Call file photo)

In Congress, where most lawmakers are hesitant to spill secrets about ongoing negotiations, answers are often found in what lawmakers are not saying. And House Republican leaders are not saying much about subsidies for health care insurers lately.

GOP leaders’ continued refusal in recent weeks to rule out funding the cost-sharing reduction subsidies, or CSRs, which President Donald Trump’s administration has stopped paying, is not a guarantee that Congress will do so. But it’s certainly a green light for negotiations to continue.

That’s a stark contrast from September, when Speaker Paul D. Ryan openly panned the developing bipartisan proposal from Senate Health, Education, Labor and Pensions Chairman Lamar Alexander and ranking member Patty Murray to fund the CSRs for two years, calling it a bailout for insurance companies. He told Senate Majority Leader Mitch McConnell at the time that it was not a viable health care solution for House Republicans.

The CSRs are designed to help offset insurers’ costs for reducing out-of-pocket costs such as deductibles and co-pays for lower-income individuals, as required by the 2010 health care law. Funding for the subsidies was not included a spending bill House Republicans released Wednesday but that measure is not expected to be get through the Senate. CSRs are still in the mix as part of broader bipartisan spending deal that could come later this month but are more likely in January.

The eventual passage of the Alexander-Murray bill, as well as a separate bipartisan Senate measure from Maine Republican Susan Collins and Florida Democrat Bill Nelson to provide $10 billion over two years for states to establish high-risk pools or reinsurance programs may be key to passage of the GOP tax overhaul.

Collins has said her vote for the Senate tax bill, which included repeal of the 2010 law’s individual mandate penalty for people who don’t purchase insurance, was based in part on an agreement with McConnell, backed by Trump, to pass both health care measures. She has said she expects the measures to get attached to a year-end, must-pass spending bill.

Ryan said last week he wasn’t part of that agreement. But as he has on other occasions in recent weeks, the Wisconsin Republican did not say the House would not consider the measures.

“I’m not deeply familiar with those conversations,” the speaker said. “Only to say that health care is broken; we’re going to have to fix health care. She’s put some very productive, constructive solutions on the table.”

“Our members are looking at the same kinds of solutions, and we think the individual mandate, which is something that the Senate did repeal, should be repealed,” Ryan added. “And then in doing that, that’s going to invite a new conversation about how we fix health care, and I think that’s all productive.”

Watch: Two Big To-Dos Remain for Trump and Congress — Tax Bill and Government Funding

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Conservatives object

House Republicans, however, have not had that conversation. Many have taken that as a sign leadership isn’t interested in passing Alexander-Murray. Many conservatives loathe the idea of funding the CSRs, the key component of that proposal, arguing it is counterproductive to their goal of dismantling the health care law.

“We’re not in favor of voting for CSRs on the spending bill,” House Freedom Caucus Chairman Mark Meadows said. The North Carolina Republican, however, has also said he doesn’t think Collins has been misled.

Freedom Caucus member Dave Brat said he raised concerns about the CSRs during a GOP conference meeting Wednesday and that Collins will have extra influence to extract that concession in the Senate now that the chamber’s Republican majority is shrinking to 51 with Democrat Doug Jones’ win in Tuesday’s special election in Alabama. Brat suggested Collins is more likely to get CSRs on a January spending bill than one that must pass by Dec. 22.

Republican Study Committee Chairman Mark Walker has said CSRs are one of three things he objects to being attached to a spending package. The other two are a debt ceiling increase and a legislative replacement for the Deferred Action for Childhood Arrivals program. GOP leaders have been clearer about not planning to include either in a year-end measure.

Moderate House Republicans, however, agree with Collins and other GOP senators who believe Congress needs to quickly pass legislation to stabilize the health insurance markets, especially if the individual mandate is repealed as part of the tax bill.

“I share Sen. Collins’s view on that,” said Colorado Rep. Mike Coffman, a member of the moderate Tuesday Group.

However, Coffman declined to say whether it would be difficult to vote for the final tax bill without a commitment to passing stabilization legislation. He noted he recently read how repealing the mandate wouldn’t make as big of a difference, saying that insurance rates are high enough that more people would be able to opt out using exemptions that are based on the cost of insurance as a percent of their income.

Rep. Charlie Dent, co-chairman of the Tuesday Group, said he believes the commitment made to Collins should be honored and stressed the need for stabilization of the markets. The Pennsylvania Republican also declined to say whether those matters would affect his tax vote.

“I want to see what the final bill looks like before I make any comments on how I’ll vote on the tax bill,” he said.

Door left open

House Republican leaders are getting pressure from both sides on funding the CSRs, but conservative opposition is the loudest. And yet leadership hasn’t ruled anything out.

House Majority Leader Kevin McCarthy went silent last week when asked whether the House would be willing to take up Alexander-Murray if it was needed to pass the tax bill. He had been answering other questions as reporters badgered him on his way from the House floor to his office.

Committee leaders have also left the door open to funding the CSRs. Ways and Means Chairman Kevin Brady, the chief House negotiator on the tax bill, acknowledged Monday that the Senate reached an agreement to address the issue as part of their internal tax negotiations. He declined to say how the House would respond.

“The Senate hasn’t acted yet on the health care stabilization approach yet, so we’re waiting to see the sort of the approach they take there,” the Texas Republican said. “We’ll continue to work on that issue.”

House Energy and Commerce Chairman Greg Walden, whose panel shares jurisdiction over health care issues with Ways and Means, provided a similar answer.

“I’m going to leave that to decision-makers at a higher pay grade than I because all that’s part of the negotiations on the tax bill,” the Oregon Republican said.

While Walden acknowledged that more work needs to be done to stabilize the market, he’s not sure that the repealing the individual mandate will exacerbate that need.

“I have never thought [the Congressional Budget Office] had it right on the market, and the data proved that every year in terms of what effect the mandate has on sign-ups,” he said. “They’re always off usually by 50 percent or more. And so I’m not convinced it’s going to have as big an impact on the market as they think it does or has or will.”

‘Not going to be blackmailed’

Despite all the signs that leadership has reversed course on the CSRs, many members say they don’t expect it to be a part of any spending deal.

“I don’t think they’re going to do it,” said Rep. Tom Cole, a leadership ally. “They’re not going to be blackmailed by a single senator. And particularly in a case where a single senator didn’t help us when we needed it.”

The Oklahoma Republican was referring to Collins’s vote against the health care overhaul in July that helped sink the measure in the Senate.

Asked about leadership’s refusal to say they won’t take up Alexander-Murray, Cole said, “I think they’re trying not to mess up anything on tax reform, and I think that’s wise. They’re trying to be supportive of the Senate.”

“They caution us all the time, ‘Don’t be critical of the Senate.’ And we know they don’t have much of a margin,” he added. “So I think that’s really what’s driving it, not a sense that they’re going to have to capitulate. Because I don’t think the votes are there amongst our members to do that in its current form.”

Notably, Republican leaders wouldn’t need a majority of their members if they struck a deal with Democrats on a spending bill that included the CSRs. Democrats want to fund the subsidies but also haven’t been saying much about them lately.

House Minority Leader Nancy Pelosi didn’t mention CSRs when listing Democrats’ year-end priorities last week. Asked if that was because she thought they were already baked into a deal, she said, “I would hope.”

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