Health and Science

Sen. Alexander: 'The blame will be on all of us' if Congress doesn't stabilize Obamacare markets

Key Points
  • Federal payments of $10 billion to insurers have been put at risk by President Trump's threat to end them.
  • Obamacare premiums could spike much more sharply if the payments end.
  • A number of senators want to guarantee the payments, and offer states greater flexibility in rules for their insurance markets.
Chairman Lamar Alexander, R-Tenn.
Tom Williams | CQ Roll Call | Getty Images

Sen. Lamar Alexander warned Wednesday that "the blame will be on all of us" if Congress does not take several simple measures soon to stabilize Obamacare health insurance markets.

"Our goal is a small step, and so many millions of Americans will be hurt if we fail," said Alexander, R-Tenn., as he opened the first of four scheduled hearings of the Senate Health Committee on a bipartisan bill that would shore up the individual insurance marketplaces.

He called for senators to reach a consensus on the bill by the end of next week.

"Otherwise, we won't be able to affect insurance rates and the flexibility of insurers until next year," said Alexander, before he and the other committee members heard testimony from insurance commissioners from five states.

Alexander wants Congress to guarantee that federal payments to insurers that reimburse them for discounts given to lower-income Obamacare customers will continue through at least the end of next year. Democratic senators want the payments to be guaranteed permanently.

President Donald Trump has threatened to end those payments, which subsidize reductions in customers' out-of-pocket health costs. The so-called cost-sharing reduction payments are projected to be worth $10 billion to insurers next year if they continue.

Insurance experts have warned that insurance premiums could spike by an extra 20 percent if the payments are not continued. And some insurers have already priced in the end of the payments in their current rate requests for 2018.

Tennesse's insurance commissioner, Julie Mix McPeak, testified Wednesday that insurers in her state have filed proposed premium rates for 2018 that assume an end to the CSR payments.

Those rates, McPeak said, are 14 percent higher than they otherwise would be because of that assumption.

"The CSR funding issue is the single most critical issue you can address to help stabilize insurance markets in 2017," McPeak said.

She was echoed by Mike Kreidler, insurance commissioner of Washington state.

"Congress must act quickly to address this growing uncertainty," Kreidler said. "You must permanently fund the cost-sharing reduction payments."

"You must take bold action now to shore up these markets. Millions of hard-working families and individuals are counting on us."

Kreidler warned that the nation's individual insurance market risked a collapse if the CSRs are not guaranteed.

"It can, and will happen if you do not take action now," he said.

Alexander also wants the bill to allow states greater flexibility in modifying rules for their own insurance markets beyond what is already contemplated by the Affordable Care Act.

The ACA's current provision for so-called 1332 waivers gives states the ability to request permission from the federal government to make changes to their insurance programs, while maintaining coverage protections implemented by Obamacare.

Alexander and Sen. Patty Murray, D-Wash., scheduled the hearings after the failure of efforts by Republican leaders in Congress to pass legislation that would repeal and replace key parts of the Affordable Care Act.

While Trump has continued to call for a new bill, many members of Congress are concerned that the individual insurance market will see much higher premiums in 2018, and an exodus of insurers, if the market is not stabilized in some way.

Alexander at the start of Wednesday's hearing noted that 31 senators had met for coffee with the state insurance commissioners before the hearing began.

"So that's a remarkable level of interest," Alexander said.