WASHINGTON -- As Republican leaders in the House and Senate go to conference and then try to round up votes for their final tax reform bill, many eyes will be on Sen. Susan Collins (R-Maine) and her healthcare demands.
Collins, who voted for the bill when it passed the Senate early Saturday morning by a margin of 51-49, said she was doing so because several of her demands were met. "I was deeply concerned that the repeal of the individual mandate [included in the tax bill] would almost certainly lead to further increases in the cost of health insurance premiums – premiums that are already too expensive under the ACA [Affordable Care Act]," Collins posted on her website just before 3 p.m. ET on Friday. "I am very pleased before the end of the year to mitigate these increases."
Collins was referring to the introduced by senators Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.), which will fund the cost-sharing reduction payments received by low-income enrollees in the ACA exchanges to pay their out-of-pocket costs in 2019 and 2020.
The other bill Collins referred to was one she introduced with Sen. Bill Nelson (D-Fla.) that would allocate $5 billion a year for 2 years to re-insure insurance companies for their high-cost patients on the ACA exchanges. Collins also said that congressional Republican leaders guaranteed that Medicare wouldn't be cut as a result of the bill.
"I have ... heard a great deal of concern from seniors with the Congressional Budget Office's determination that an automatic 4% cut to Medicare, estimated to be roughly $25 billion for fiscal year 2018, could be triggered by the passage of this legislation as a result of the Pay-As-You-Go Act of 2010 (PAYGO), even though there is no intention for such a reduction to occur," she said. " urging that we immediately remove the threat of an automatic cut in the program's funding, which has been done on numerous occasions before, and these cuts will be avoided. Speaker Paul Ryan has also joined in this pledge."
Analysts Skeptical
However, several experts doubted whether Collins's expectations would really be fulfilled. "None of the stuff she wants can get done in [the tax reform bill]; it has to get done separately," said Rodney Whitlock, vice president for health policy at ML Strategies, a Washington consulting firm. And because the bills would not be subject to the reconciliation process, they would need 60 Senate votes to pass, he added. "She can want those votes, but she can't just make them happen."
That means Democrats would have to help pass them, and they're going to want something in return -- for example, an extension of the Deferred Action for Childhood Arrivals (DACA, or "Dreamers") legislation, he continued. "It is just remarkable the number of moving pieces in play in the next 3 weeks."
Collins probably wanted the House and Senate to pass those other bills even before the tax reform bill went to conference, said Julius Hobson, a healthcare lobbyist at Polsinelli, a consulting firm here, "but the Freedom Caucus said, 'That will be a cold day in hell'." He was referring to a group of conservative House Republicans who Collins's position.
"I don't know how it's going to go; they could try to fold [those bills] into a continuing resolution, since the government is going to run out of money at midnight Friday," Hobson said. "But there is a lot of stuff to roll in; for instance, there is a serious problem with CHIP [the Children's Health Insurance Program], with five states about to run out of money."
"When they're up against a deadline, any single entity could throw things off, so that could make it difficult to get it done," he added.
Lots of Republican Opposition
And getting House and Senate Republicans to keep these promises looks a lot less likely now that the tax reform bill has passed the Senate, said Joe Antos, PhD, scholar in healthcare and retirement policy at the American Enterprise Institute, a right-leaning think tank here. And Collins "hasn't exactly been helpful to [Senate Majority Leader Mitch] McConnell."
Antos did, however, praise the legislation Collins supported. "I agree with her -- in an orderly world, we'd be paying the CSRs, and we'd have national reinsurance," he said. "However, reinsurance sounds like a bad word to an awful lot of Republicans." As well, congressional liberals don't believe $10 billion over 2 years for reinsurance is adequate, he said. "So most of these things look pretty dead to me."
Marianne Udow-Phillips, MHSA, executive director for the Center for Healthcare Research & Transformation (CHRT) at the University of Michigan in Ann Arbor, also was skeptical. "I know she ... said she has an iron clad commitment that Medicare won't be cut. I don't know how that's possible," she said in a phone interview. "Even if she got support from McConnell to try to keep Medicare from facing cuts, and on the Alexander-Murray bill and her [bill] on reinsurance. He might be able to strong-arm other senators, but that's not clear, and he has no control over the House."
Even if the Alexander-Murray and Collins-Nelson bills pass, "the Congressional Budget Office has come out and said they wouldn't have much effect, and 13 million people would [still] lose coverage," she added.
Although funding the CSRs and providing reinsurance are both important ways to stabilize health insurance premiums, "they may not offset the negative effects of not having a way to either incentivize or penalize people [when it comes to] having health insurance," said Udow-Phillips. "In almost all previous versions of the repeal-and-replace discussion, there was some mechanism to get people to buy insurance, whether it was a waiting period, or higher premiums if you delayed getting coverage, or some version of the mandate -- some recognition that you need a way to encourage healthier people to buy insurance."
CSR Bill Complications
And passing the Alexander-Murray bill comes with a wrinkle that hasn't been much discussed, according to Bob Laszewski, president of Health Policy and Strategy Associates in Alexandria, Virginia. "The calculus has been that the CSR re-funding would offset the additional premiums consumers will eventually have to pay because the individual mandate was repealed. On the surface, that is right," he said in an email. "But it's a lot more complicated than that."
That's because "the Alexander-Murray bill currently has a provision in it that says the health plans have to promptly refund to consumers the 2018 rate increases attributable to the CSR rate increases once the bill becomes effective," he explained. As a result, "getting rid of the individual mandate on January 1, 2018, means that the carriers will have 10% to 20% higher costs for 2018 but their 2018 rates have already been established ... [So] as it stands, the carriers would be out a net 10% to 20% because any CSR money would have to be refunded if the Alexander-Murray bill passes, while at the same time they are going to be hit by claim costs 10% to 20% higher because, during the open enrollment, it is now clear consumers don't have to buy insurance."
In the end, according to Whitlock, "we are pawns in a conversation between the 'Big Five'" -- President Trump, McConnell, Senate Minority Leader Chuck Schumer (D-N.Y.), House Speaker Ryan, and House Minority Leader Nancy Pelosi (R-Calif.). "Healthcare folks can want stuff, defense folks can want stuff, but ultimately the Big Five will determine a large portion of that, give everybody marching orders, and send them off to finish the deals."