2. Republicans in Congress want to repeal Obamacare, not prop up the individual insurance markets created by the law.
Let's take that last point first.
Congress's de facto position is inaction. It needs an incentive to do something. And right now Republican lawmakers don't see a reason to take an affirmative action that is the opposite of what they campaigned on doing.
House Republicans in particular prickle at the notion of approving Obamacare subsidies. They passed an Obamacare repeal in May only to see it fail in the Senate in July by one vote. Why would they take a politically tough vote — in some cherry-red districts, a politically egregious vote — when they did their job to repeal Obamacare?
Some Senate Republicans have expressed openness to the compromise, which gives states more flexibility to manage Obamacare. But Senate Republican leaders aren't excited about the idea of voting to throw Obamacare a lifeline either.
Sen. John Cornyn (R-Tex.), the Senate's No. 2 Republican, wondered out loud to reporters Tuesday whether the proposal is “compatible” with Republicans' goal to repeal and replace the law.
So Republicans don't have an incentive to help out Obamacare. Yet. Outside market influences could soon force them to reconsider their reluctance.
Health-care experts say that Trump's decision last week to end the subsidies could be a self-fulfilling prophecy to send the Obamacare exchanges in a death spiral. It would make insurance plans on the exchanges too expensive for the insurance companies to sell and people to buy.
An estimate by Washington consultant group Avalere Health finds that if Congress (or Trump) doesn't reinstate the subsidies that Trump cut, health insurance companies could lose $1 billion in federal funding over the next few months.
That will likely translate to premiums going up for people of all income levels who shop for insurance on the exchanges when open enrollment starts Nov. 1.
In other words, Trump's actions to cut subsidies and Congress's subsequent inaction to reinstate them in time could directly lead to higher premiums, which is also the very opposite of what Republicans campaigned on.
This situation could become so dire that Congress could find political incentive to act; not unlike a growing bipartisan effort to ban a deadly gun accessory, bump stocks, used in the Las Vegas massacre.
Temporarily helping out Obamacare might not be as politically distasteful as some lawmakers perceive. As Republicans have been trying to repeal the law, Obamacare and big-government ideas like single-payer health insurance have been getting more popular. A September Washington Post-ABC News poll finds that more than half of Americans prefer Obamacare to the latest GOP plan. That includes a quarter of Republicans.
But then again, costlier insurance was always part of the deal of repealing Obamacare. The nonpartisan Congressional Budget Office estimated that various versions of Republicans' Obamacare repeal plans would take away health insurance for millions and raise costs for some of the most vulnerable populations, like seniors.
The president seems to have settled Tuesday night into Wednesday morning on not supporting the subsidies. Which makes sense.
His earlier suggestion he supports more subsidies doesn't match up with his actions, which seem singularly targeted at unraveling Obamacare. Congress wouldn't be in this position in the first place if Trump hadn't threatened to end (then followed through on that threat) these subsidies.
Basically, until Trump and Republicans see a political benefit to propping up Obamacare, this bipartisan deal will likely have very little that's bipartisan about it.