Draft Of Health Care Bill Addresses Trump Concerns About 'Bailouts' For Insurers A draft of the bipartisan legislation obtained by NPR would restore subsidies to insurance companies to assist low-income consumers and require them to go to consumers as rebates.
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Draft Of Health Care Bill Addresses Trump Concerns About 'Bailouts' For Insurers

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Draft Of Health Care Bill Addresses Trump Concerns About 'Bailouts' For Insurers

Draft Of Health Care Bill Addresses Trump Concerns About 'Bailouts' For Insurers

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MARY LOUISE KELLY, HOST:

There's a new plan to stabilize the Affordable Care Act for next year, specifically to shore up its insurance markets. Now, this is a bill from a bipartisan group of senators led by Republican Lamar Alexander and Democrat Patty Murray. The centerpiece is a guarantee - a guarantee that the government will keep paying subsidies to insurance companies who sell Obamacare policies. Insurance companies call the payments crucial to keep health premiums low. But President Trump calls them a bailout, and he has sent mixed signals about whether he's going to get behind this bill.

(SOUNDBITE OF ARCHIVED RECORDING)

PRESIDENT DONALD TRUMP: I won't do anything to enrich the insurance companies because right now, the insurance companies are being enriched. They've been enriched by Obamacare like nothing anybody's ever seen before.

KELLY: NPR's health policy correspondent Alison Kodjak is here to walk us through this. Hey there, Alison.

ALISON KODJAK, BYLINE: Hey, Mary Louise.

KELLY: So the president says he does not want to bail out insurance companies. Start there. Are these payments a bailout?

KODJAK: Well, no, they're really not. These would be best described as reimbursements. Because the Affordable Care Act requires the insurance companies to give discounts on co-payments and deductibles to their low-income customers, the law says the government will pay the companies back for that cost. So these are really known - they're called pass-through payments because the government gives the money to the companies, and then they pass that money along to consumers at discounts.

KELLY: And remind us of the history here because we're all trying to keep up with all of the twists and turns of what is going on with health care and what the future may hold. These payments have been controversial for a while. They were the subject of a lawsuit. The House sued the Obama administration, claiming they were legal. What was that argument about?

KODJAK: So the House argued that the payments have never been appropriated. They never passed a bill saying, you can have this money. And a judge agreed. So the Obama administration appealed, and the judge said the government could continue making the payments during that appeal. But that meant their future's always been in question. And President Trump - from the moment he took office, he's been threatening to cut them off. And finally last week, he said he's ending them for good starting immediately.

KELLY: Right, by executive action. What happens if that decision stands? What are the implications if this money goes away?

KODJAK: Well, insurance companies have been planning for it because of these ongoing threats. And they still have to give their customers these discounts because that's written into the law. So they basically all announced - or most of them announced that they would raise premiums starting next year. And on average, across the board, those premiums are going up about 20 percent to make up for the revenue that's lost.

KELLY: OK, and now into the fray comes this bill. This is the Patty Murray-Lamar Alexander bill which would restore these payments. How exactly would it do that? How would it work?

KODJAK: So it would bring back the subsidy payments starting immediately - so next month even. And it appropriates the money for them for this year, 2018 and 2019. But then that creates this whole new problem, which is that the insurance companies, as I just said, have already said they're going to raise their premiums next year because they didn't think these payments would be in place. And that could be what the president's referring to when he talked about enriching insurance companies.

They - the subsidies were going to disappear, and now they're not. The bill spends a lot of time making sure that these payments are somehow paid back and go to consumers rather than enriching insurance companies, as the president is afraid that they will. And ultimately, the Affordable Care Act limits how much profit insurers can make. They have to spend 80 percent of their premiums on health care. So consumers could get a rebate that way, too.

KELLY: That's NPR health policy correspondent Alison Kodjak. Alison, thank you.

KODJAK: Thank you.

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