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Bipartisan Senate short-term ACA fix may already be in trouble

A bipartisan Senate deal to temporarily restore subsidies cut off by U.S. President Donald Trump may already be in trouble on Capitol Hill, with some House members declaring they would not support it and others giving it a lukewarm response.

Trump has also sent mixed signals about his support for the agreement by Sens. Lamar Alexander, R-Tenn., chairman of the Senate Health, Education, Labor and Pensions Committee, and Patty Murray, D-Wash., the panel's ranking member.

A day after expressing support, Trump tweeted Oct. 18 that while he was "supportive" of Alexander and the process, "I can never support bailing out" insurance companies "who have made a fortune" with the Affordable Care Act.

In an Oct. 18 meeting with senators, Trump also added that "I'm not going to do anything to enrich the insurance companies."

House Speaker Paul Ryan, R-Wis., also appears to object to the Alexander-Murray proposal. "The speaker does not see anything that changes his view that the Senate should keep its focus on repeal and replace of Obamacare," his spokesman Doug Andres told S&P Global Market Intelligence.

The agreement would fund the cost-sharing reduction, or CSR, payments for two years, which help low-income Americans with plans provided under the ACA cover their out-of-pocket costs for prescription drugs and doctor visits.

Trump said Oct. 12 he was terminating the payments — an action he had long-threatened to take. The president is already facing at least one multiparty lawsuit over the decision.

"According to witnesses at our hearings and according to the Congressional Budget Office, without these cost-sharing reduction payments, premiums will rise, the debt will increase by nearly $194 billion over 10 years, and up to 16 million Americans may find themselves living in counties where no company sells insurance in the individual market," Alexander said on the Senate floor Oct. 17.

The Alexander-Murray proposal would also permit anyone in the individual market to purchase a catastrophic plan, often called copper plans, which are currently limited to Americans under 30 years old.

Those plans are intended to have lower premiums costs, but a person would pay for a greater percentage of their costs for care up front, such as for deductibles.

Alexander noted that Sen. Tim Scott, R-S.C., sponsored that measure in the legislation.

"Sen. Scott's leadership will help many Americans avoid turning a medical catastrophe into a financial catastrophe," the Tennessee lawmaker said.

Also under the Alexander-Murray agreement, states would have greater flexibility in using waivers to approve insurance plans with affordability comparable to those offered under the ACA requirements — provided they include the so-called 10 essential health benefits, such as prescription drugs and maternity care.

The Senate deal also would restore $106 million in funding intended for advertising and outreach to urge Americans to enroll in the ACA plans — funds also cut by Trump — although it would take the money out of the federal government's hands and make it available to states in the form of grants.

"This is an agreement that I am proud to support, not only because of these important steps to strengthen our healthcare system, but because of the message it sends about the best way to get things done in Congress," Murray said Oct. 17 on the Senate floor.

While the agreement received praise from Sens. Susan Collins of Maine and John McCain of Arizona — two Republicans who objected to the latest ACA repeal effort, stopping it in its tracks — there appeared to be trouble brewing on the House side.

Rep. Mark Walker, R-N.C., who leads a group of conservatives, known as the Republican Study Committee, condemned the agreement in a series of tweets as something that propped up the ACA — a law his party promised to dismantle.

Senate Majority Leader Mitch McConnell, R-Ky., has also not yet committed to bringing the Alexander-Murray proposal to the chamber's floor for a vote, telling reporters "we haven't had a chance to think about the way forward yet."

Shortly after Alexander and Murray disclosed to reporters a deal had been struck, Trump sounded positive about it, saying the White House had been involved in reaching the agreement.

"It is a short-term solution so that we don't have this very dangerous little period, including dangerous periods for insurance companies, by the way, for a period of one year, two years," he told reporters from the White House Rose Garden Oct. 17. "We will have a very good solution. But we're going to have a great solution, ultimately, for healthcare. And they are working together and I know very much what they're doing."

But in a speech later that night at the conservative Heritage Foundation, Trump said he continued "to believe Congress must find a solution to the Obamacare mess instead of providing bailouts to insurance companies" — a term he has often used in describing the CSR payments.

At an event hosted by Axios, Alexander said Trump had "completely engineered" the bill, but also said the president was reserving his options on it. Alexander had just finished speaking minutes before Trump's tweet.

Sen. Bill Cassidy, R-La., who co-sponsored an ACA repeal bill with his Republican colleagues in the Senate, Lindsey Graham of South Carolina, Dean Heller of Nevada and Ron Johnson of Wisconsin — the legislation Collins, McCain and Rand Paul of Kentucky refused to back — insisted that the CSR payments were unconstitutional, but he said he would study the Alexander-Murray proposal to see if it set the stage for the Graham-Cassidy measure.

Cowen & Co. analyst Rick Weissenstein said Trump's and Ryan's remarks "should not be taken as a death knell for the bill" and that the legislation's best chance now is to be wrapped in with a large year-end measure, like appropriations.

Furthermore, Cowen & Co. analyst Eric Assaraf said he believed the bill would likely garner enough votes for passage and would be signed by Trump, although he said it was unclear if the proposal would impact premiums or market participation in 2018, as rates have been finalized and ACA open enrollment begins Nov. 1.