Senate Dems, GOP reach deal to reinstate ObamaCare's cost-sharing subsidies

It’s encouraging to know that our two very divided parties can still come together to figure out ways to prop up ObamaCare.

Trump forced Congress’s hand last week when he announced HHS would no longer pay the cost-sharing subsidies. For good reason: They were never formally appropriated by Congress to begin with and had already been ruled unconstitutional by a federal court. Obama had willed them into existence in service to his pet boondoggle. By pulling the plug, Trump was not only getting right with the law, he was pulling a key piece out of the teetering jenga tower that is ObamaCare. Congress could respond either by setting aside its differences and passing the subsidies properly, replacing the missing jenga piece, or it could let the tower teeter as insurers jacked up premiums in order to make up for the lost revenue. Higher unsubsidized premiums would risk a death spiral as some consumers inevitably dropped out of the markets, requiring even higher premiums going forward.

Letting the tower topple would be politically painful and verrrrrry risky for both parties, not knowing which one would get the lion’s share of the blame from voters. So Patty Murray and Lamar Alexander huddled, and voila: They’ve found the missing jenga piece.

As one part of the deal, the subsidies would be funded for two years, a step that would provide at least short-term certainty to insurers. The subsidies, known as cost-sharing reductions, lower out-of-pocket costs for low-income consumers…

Mr. Alexander said that in addition to funding the payments to insurers, the deal would also give states “more flexibility in the variety of choices they can give to consumers,” which should appeal to Republican lawmakers eager to give states more say over health care.

In return for spooning out Uncle Sam’s sugar to insurers for two more years, Republicans will get a bit more flexibility for states to approve plans that don’t comply with ObamaCare (provided they’re of “comparable affordability”) and will make cheaper catastrophic coverage more available to younger consumers. Good deal? Well, it solve’s the GOP political problem short-term by resolving the subsidies issue until after the midterms are over — *if* the Murray/Alexander bill passes, that is.

But what if it doesn’t pass? Presumably, with Alexander and Murray behind it, there’ll be no problem getting to 60 in the Senate. Getting to 218 in the House could be trickier because, like I said up top, at base this is a bailout of ObamaCare. The Freedom Caucus and the Republican Study Committee, which has a lot of members, won’t want to vote for it. “Anything propping [ObamaCare] up is only saving what Republicans promised to dismantle,” said RSC chairman Mark Walker to the Hill. Paul Ryan could still pass it with Pelosi’s help, but if he’s following “the Hastert Rule” he’s not supposed to bring any bill to the floor that doesn’t have the support of a majority of his own caucus. How many House Republicans are going to want to hold their noses and vote yes on a bill that conservatives like Walker are calling a bailout for Obama’s signature program?

Trump will have to twist some arms but he too will find it distasteful having to go to bat for ObamaCare. He’s said many times that he’s content to let the law fail, presuming that the public will blame Democrats for the chaos that follows. He was battered by the press over the weekend for letting the cost-sharing subsidies lapse and now he’ll have to turn around and sell them to reluctant House Republicans anyway. Just yesterday he slammed the subsidies as a “gravy train” for the insurance industry. Imagine if he lends Ryan a hand by making the case publicly for reinstating the subsidies, only to have the effort fail in the House. It’ll be a double whammy — the caucus will have rebuked him *and* he’ll have spent political capital on defending the use of taxpayer money for ObamaCare. Steve Bannon and Roy Moore might make him pay too by agitating in favor of letting the subsidies lapse altogether. I think the House will pass the bill, just to hedge against the risk that Republicans end up being blamed for premium hikes otherwise, but you never know. Matt Drudge, for one, seems unhappy:

Here’s Trump yesterday declaring ObamaCare “dead.” Twenty-four hours later, it’s alive again! Alive!