Bipartisan negotiators announced Tuesday that they had struck a deal to temporarily stabilize Obamacare markets. Republican Sen. Lamar Alexander, Tenn., agreed to continue paying “cost-sharing reduction” payments that the government promised insurance companies, and Democratic Sen. Patty Murray, Wash., agreed to relax health-market regulations a bit. Both sides of this deal contain good policy.
But House conservatives attacked it, and President Donald Trump, who initially sounded a favorable note, soon flip-flopped. House Speaker Paul Ryan, R-Wis., and Senate Majority Leader Mitch McConnell, R-Ky., face a test: Will they cower in the face of this irrational opposition, preventing their chambers even from voting on a plan that, polls indicate, would be broadly popular?
If they favor small government, they ought to like this deal. The Congressional Budget Office calculated that restricting the insurer payments would actually cost taxpayers $194 billion over a decade. Killing the deal, meanwhile, means the Republicans would get no major regulatory reforms unless they repealed Obamacare, which is no longer on the short-term agenda.
Contrary to Trump’s rhetoric, the payments are not bailouts, but reimbursements for subsidies that the government ordered insurance companies to offer low-income people. If the payments are not made, premiums would spike unnecessarily. Courts would eventually order the government to pay insurers, because the law requires it, which would force taxpayers to pay out even more in massive legal settlements.
The only coherent argument Republicans had against the cost-sharing payments is that Congress did not technically appropriate the money that was being distributed. The Alexander-Murray compromise would properly appropriate the funds.
Alexander points out that his compromise is about preventing chaos in health-care markets over the next couple of years, regardless of what Republicans decide to do to them after that. GOP repeal-and-replace bills contained similar provisions to temporarily stabilize the health-care system before it could be reshaped. Even Trump acknowledged that such a plan does not necessarily conflict with the long-term goal of reforming the health-care system.
Republicans, then, have acknowledged that the government can easily do more to stabilize the existing health-care system. Democrats should not have had to bargain for GOP cooperation. Yet they offered regulatory reforms anyway. Will Republicans really kill a plan that would buttress insurance markets and add more of the regulatory flexibility they have been demanding, without ending their dream of ripping up the Affordable Care Act?
Killing this deal would provide more evidence the GOP has become, as former Louisiana governor Bobby Jindal, R, once put it, the stupid party, simplistic in its policy views, cowardly in its fear of the base, toddler-like in the tantrums it throws when it does not get its way. It would also be a bad sign about the state of the U.S. political system. A moderate compromise struck by adults such as Alexander and Murray is the way Congress should work. Is that still possible?