Alaska Gov. Walker signs onto Murkowski-backed bipartisan Obamacare fix

It's the opioid news conferenceWalker speaks at a news conference earlier in the 2017 legislative session. (Photo by Office of the Governor)

Gov. Bill Walker today threw his support behind a proposed bipartisan fix to the nation’s health care system, joining a bipartisan coalition of governors who’ve become a powerful voice on health care.

The bipartisan health care fix proposed by Sens. Lamar Alexander, R-Tenn., and Patty Murray, D-Wash, was officially introduced today with 24 co-sponsors, including Alaska’s Sen. Lisa Murkowski. The support includes 12 Republicans and 12 Democrats.

The measure would guarantee cost sharing reduction payments (the ones that President Donald Trump cut off late last week) for two years and give states greater flexibility in waiving Obamacare rules as they see fit.

“I am pleased to see that federal lawmakers are coming together in a bipartisan manner to both protect and increase access to affordable health care coverage,” Walker said in a statement.

A letter from the bipartisan group of governors praised the compromise. The letter explained Trump’s decision to abruptly end the payments is pushing the insurance markets to the brink of ruin.

“The timing of the termination—days before open enrollment begins—is sowing confusion among consumers and leaving states
scrambling to develop solutions to stabilize their insurance markets,” said the letter. “Stabilizing insurance markets is one of the primary areas where Congress can take action to ensure that consumers have affordable health care options.”

[PDF: Read the bipartisan group of governors’ letter supporting Alexander-Murray]

The state of the cost sharing reduction payments are particularly critical to the individual health care marketplaces.The reductions help low-income people buying insurance through the individual marketplaces pay for out-of-pocket expenses like copays and premiums. However, those reductions are mandated by law so low-income people buying insurance will likely continue to see the benefit at the cost of the insurance companies, which means the insurance companies will face either raising rates on everyone or withdrawing from markets entirely.

The payments are separate from premium tax credits, which reduce premiums for a wider range of people and are protected by law.

The Congressional Budget Office earlier this year estimated that insurance premiums would be nearly 20 percent higher without the cost sharing reduction payments next year alone (Alaska’s estimated to be about 5.5 percent more without the payments). The CBO also estimates the federal deficit will actually increase because of Trump’s decision to cut the subsidies because those premium tax credits that are guaranteed by law would go up if rates go up.

The flexibility provisions would help other states follow in the footsteps of Alaska, which received a waiver that funnels federal money into a reinsurance program to help cover the costs of people with expensive medical conditions. The program is credited with a planned 21 percent reduction in premiums next year, which will help ease the crunch if the cost sharing reductions aren’t restored.

Though the payments go to the lowest income buyers of insurance, it’s likely that people who’re making too much to qualify for a subsidy or tax credit will see the most financial pain with Trump’s decision.

The Alexander-Murray proposal faces an uphill battle. Trump, after showing some initial support for a bipartisan deal, has since backed away and House Speaker Paul Ryan said the Senate should be focused on repealing Obamacare, not fixing it. Still, as explained by a report from Axios, Democrats stand to have a great deal of leverage heading into the end of the year negotiations that could help get this change some attention.

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