A group crafting a new blueprint to overhaul Obamacare wants Congress to act on its recommendation this summer to avoid Republican blame for high premiums.
The group of more than 40 conservative policy analysts aims to release a recommendation in June to revive the Republican healthcare reform process, according to a source familiar with the effort. The recommendation, which is being spearheaded by the Heritage Foundation and former Sen. Rick Santorum, R-Pa., would convert the law’s Medicaid expansion and insurance subsidies into block grants provided to states. These changes would not apply to traditional Medicaid.
The group is targeting June to coincide with the initial release of rates for Obamacare in most states. Several states have already released major rate hikes for Obamacare next year, citing Trump administration policies and the repeal of the individual mandate’s penalties for the boost in premiums.
“We want to be in the midst of the premium discussion because fundamentally that will be the political pressure that compels action,” the source said.
The goal is to have the Senate take up the block grant recommendation this summer.
“Our plan will come out in June and then they have July and part of August really to get their work done,” the source said. “There is really no way you are going to have an impact on 2019 [Obamacare coverage year] premiums unless they act this summer.”
Insurers finalize Obamacare plans and rates for 2019 just weeks before this fall’s midterm elections, in which Republicans are at risk of losing control of Congress.
Senate Majority Leader Mitch McConnell, R-Ky., has toyed with canceling the Senate’s traditionally month-long August recess. But it remains unclear if there is enough support for taking up Obamacare once again during an election year.
The source familiar with the effort said that so far they haven’t gotten any “hell no” from Republican senators on the new effort. The White House is also “well aware” of the effort, the source added.
The recommendation would provide a blueprint on how to structure the block grants, but would defer to Congress on the funding formula. Another source familiar with the recommendation said it is different from a bill sponsored by Sens. Bill Cassidy, R-La., and Lindsey Graham, R-S.C., which also took Obamacare funding and turned it into block grants. That bill collapsed last September due to insufficient GOP support.
The new plan would, unlike Graham-Cassidy, require that 50 percent of the block grant funding given to a state go towards supporting people to purchase private health plans. These include either small group health plans or plans available on the individual market, which is used by people who don’t get insurance through a job or the government.
“We don’t want states to use this money to just say we will take it and throw everybody on Medicaid because that is easy,” the source said.
The recommendation would allow states that get the block grant to waive rules requiring plans on the individual market cover essential health benefits like maternity care or mental health.
States would also no longer have to maintain a single risk pool, a requirement that prevents insurers from separating sick and healthy plan enrollees into separate risk pools.
Obamacare required insurers to consider all enrollees in all health plans to be members of a single pool, and to set premiums accordingly. The goal was to ensure that sicker people don’t have to pay higher premiums, but in practice, it also has meant higher premiums for younger or healthier individuals with lower medical costs.
The proposal would preserve the requirement for plans to cover pre-existing conditions, but some experts have said that eliminating the single risk pool requirement would cause premiums for these people to skyrocket.
Anticipating this objection, the proposal would require a state getting a block grant to set up a risk mitigation system such a high-risk pool or invisible risk sharing. Under a high-risk pool, the state subsidizes the cost of sicker people with high medical claims.
However, the proposal does not include a mandate for how much money a state must give to such a program.
Experts have said that a high-risk pools can theoretically work, but a lot depends on how generously they are funded.
Other bills sought to convert Medicaid funding into either a block grant given to a state or a per capita cap on funding per beneficiary in order to cut costs. While the group is in favor of such reforms, it decided to focus just on Obamacare itself.
Republicans have a 51-vote Senate majority after Democrat Doug Jones’ victory in Alabama last year. That is one seat less than what they had last year when GOP Sens. Lisa Murkowski of Alaska, Susan Collins of Maine, and John McCain of Arizona voted to defeat Obamacare repeal. With McCain is still recuperating from brain cancer treatment, effectively Republicans are down to 50 votes. Vice President Mike Pence can break a 50-50 tie, but it remains unclear if the previous opponents to Obamacare repeal have flipped.
Sen. Rand Paul, R-Ky., has also objected to use of a block grant because it doesn’t fully repeal Obamacare.
