CBO: GOP-led ACA stabilization plan would lower premiums

A signpost with the words Affordable Care Act
Sen. Lamar Alexander revealed a proposed ACA stabilization bill to AHIP's board of directors that would fund CSRs and reinsurance. (Image: Getty/kroach)

Sens. Lamar Alexander and Susan Collins have crafted legislation to shore up the Affordable Care Act's exchanges that would fund cost-sharing reduction payments and reinsurance, but doesn't solve a partisan conflict over abortion provisions. 

The proposal, which was presented to the board of directors for America's Health Insurance Plans (AHIP), would fund both CSRs and reinsurance for three years, but would bar payers who cover abortions from receiving the CSR payments, according to a report from Axios. 

The $30 billion set aside for CSRs and reinsurance would reduce ACA exchange premiums by 10% in 2019 and then 20% in 2020 and 2021, according to projections from the Congressional Budget Office, The Hill reported. Democrats have pushed for three years of funding for CSRs, and Collins, R-Maine, sought to add a reinsurance program to the mix to compensate for the repeal of the individual mandate. 

Alexander, R-Tenn., told AHIP's board that if Democrats get on board with the plan "it will be law by the end of the week," according to Axios, as he wants to include it in an omnibus spending bill that must pass by March 23.

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The updated stabilization plan, according to The Hill, would also grant states greater flexibility to design insurance plans and would create a streamlined process for states to obtain waivers from the federal government to test new approaches. It would expand the sale of catastrophic health plans as well. 

Alexander and Collins' plan sets the GOP and Democrats up for a showdown over the abortion provisions, which Sen. Patty Murray, the leading Democrat in the bipartisan talks, said were a "nonstarter." 

However, House Speaker Paul Ryan, of Wisconsin, has said he would not a bring a bill that did not include the abortion provisions to a vote. Meanwhile, in a Fox News op-ed, Sens. Ted Cruz, R-Texas, Mike Lee, R-Utah, and Reps. Mark Meadows, R-N.C., and Jim Jordan, R-Ohio, flatly denounced legislation that includes CSR or reinsurance funding. The lawmakers urged Republicans to reject the measures, calling the proposals a "Frankenstein combination of a new Republican-created insurance bailout plus funding ObamaCare’s existing pro-abortion CSR bailout."

The White House also issued several requests for elements it wants to see in an ACA stabilization bill, an effort to tug proposed legislation to the right. In a memo released last week, it recommended that Congress include provisions to adjust the law's rate-banding rule from 3:1 to 5:1, allowing insurers to charge older people five times as much as younger people.