Congress is targeting funding sources for the Affordable Care Act as it works to reach a budget agreement before the end of the year.
Republicans want the omnibus budget package to extend funding restraints that insurance companies and failing co-op insurers say are forcing them out of the ACA's insurance exchanges.
Also at risk are two ACA taxes that have been criticized by both parties. Two-year delays of the medical-device tax and the Cadillac tax on high-end insurance plans could be included in the budget's tax-extender package.
Lawmakers are also considering a one-year delay on the ACA's premium tax borne largely by health insurers.
Although Democratic leaders joined Republicans in bashing the Cadillac tax, neither side has articulated a proposal for replacing the revenue it is expected to provide.
However, Larry Levitt, senior vice president for special initiatives with the Kaiser Family Foundation, said the proposed changes would have a modest long-term effect and “wouldn't affect the core of the ACA,” which is the expansion of insurance coverage to millions of Americans.
The changes could have a political effect, however. Democrats have been unwilling to tweak the law until now, and Republicans may see the proposals as a chance to start chiseling away at its provisions, Levitt said. “It would be the first major change to the ACA."
The Cadillac tax, set to begin in 2018, has always been unpopular and controversial even among supporters of the ACA, particularly labor unions, which consider generous health benefits the fair and hard-won fruits of decades of collective bargaining.
Even though the tax is widely supported by health economists, lawmakers are likely to see more of a political upside in killing or delaying it.
“Voters want dessert and not their vegetables,” Levitt said. “The Cadillac tax is definitely in the vegetable category.”
The risk-corridors program was included in the ACA to help insurance companies deal with the initial uncertainty of how many people would sign up under the law, and how many medical claims they would file. Companies that saw higher-than-expected claims costs could receive funding support, while those who handled lower-than-expected costs would give to the program.
In a budget deal worked out almost exactly a year ago, Republicans added a provision that required the risk-corridors program to be budget neutral.
In 2014, insurers paid $362 million to the program, but asked for $2.87 billion. The CMS was able to pay only 12.6% of those requested funds. Several co-op insurance programs that shut down this year blamed losses they expected to be covered by the program as a primary reason for their failure.
Republicans, particularly presidential candidate Sen. Marco Rubio of Florida, have railed against the risk-corridors program as a taxpayer “bailout” to protect insurance company profits. Rubio has claimed credit for striking a blow to the law by inserting the provision in last year's budget deal that limited the Obama administration's ability to fund the program.
Some experts have noted, however, that the government remains legally obligated to make the full payments to insurers, and the CMS has pledged to do so.
The budget deadline is Friday, but the White House has said it would agree to another short-term continuing resolution if an agreement is reached that can be passed during Congress' last week in session.
