4 Ways a Budget Deal Could Change Obamacare
When the government shutdown began, Obamacare was front and center. House Republicans wanted to defund the health law—and said they wouldn't vote for any continuing resolution that kept funding in place.
But with President Obama and Democrats in the Senate determined to protect the health care overhaul defunding the law through the budget process, or even significantly rolling it back, was always unlikely.
Still, reports from last night and this morning about an initial offer made by the leadership of both parties in the Senate and a likely counteroffer made by House Republicans this morning indicate that some health care tweaks may end up in a final deal.
A delay of Obamacare's reinsurance fee: Obamacare institutes a $63 per enrollee annual reinsurance fee for the first three years the exchanges are in effect. The fees go into a pool that essentially acts as a backstop for any insurer that ends up attracting an unusually high percentage of sicker than average people. The reinsurance fee is charged per head, not per plan, so it makes family coverage more expensive. Big employers like Delta don't like it; the airline estimates that it will cost the company $10 million next year. Labor unions don't like it either, because it adds to the cost of health coverage. The proposal currently in play would not charge the fee next year, but would still fund the insurer backstop in 2014 through an advance from the Treasury, according to Politico. That advance would then be paid by an additional year of fees tacked on at the end.
A delay of Obamacare's medical device tax: The bill the House is reported to be moving on this morning would delay the 2.3 percent excise tax on medical device manufacturers for two years. That's a partial win for the medical device lobby, which has been pushing to kill the tax for a while. It's also a provision with bipartisan opposition: Last year, 18 Democratic Senators signed a letter urging delay of the device tax. Most Obamacare opponents are not big fans of the tax either. But privately some have worried about attempts to repeal the tax entirely, as doing so would remove a pressure point for Democratic legislators.
A requirement that members of Congress buy health insurance on the exchanges without employer subsidies: Obamacare was written with a requirement that members of Congress and their staffers can only be offered coverage through the health exchanges. Typically, those exchanges don't allow individuals to use tax-advantaged employer contributions to help pay for insurance. But a rule issued earlier this year said that members of Congress and their workers could use their existing employer contributions. Reports suggest that this morning's House proposal would reverse that rule for legislators, but not staffers.
Enforcement of Obamacare's income verification provisions: This is an interesting one, because it doesn't really change Obamacare. Instead, it basically asks the administration to enforce the law as it's written—and certify that it's doing so. Some of the health law's income verification provisions were delayed over the summer, meaning that individuals applying for insurance subsidies would essentially be relying on the honor system. This addendum would require that the administration actually verify the income of subsidy applicants and that the Health and Human Services Secretary certify that the administration was doing so. Some House Republicans have already expressed concern about including this provision, because it treats enforcement of a law as a concession—a potentially problematic precedent.
Needless to say, all of this could change before a final deal is made. Already there are signs that the White House, which would also need to agree to any final deal, isn't thrilled with this morning's House offer. But whatever happens, it's unlikely that any final agreement that moves through the Senate and the White House will include larger-scale changes to the health law. If Obamacare is going to be significantly altered, it won't be through the budget negotiation process.