The White House signaled to Senate Republican negotiators Friday that it wants a bipartisan health-care bill to include retroactive relief this year for individuals and employers subject to the Affordable Care Act’s insurance mandate, according to individuals briefed on the matter, a request that is sure to anger Democrats.
The individuals briefed on what the White House privately signaled to Senate Republicans spoke on the condition of anonymity to describe closed-door talks that had not been announced publicly. They said that nothing was final and that the negotiations were ongoing and could change rapidly.
While the moves were part of what could become a more extended negotiation, the White House requests — which also include providing states with broader leeway — could derail the carefully crafted bipartisan package unveiled this week.
Senate Majority Leader Mitch McConnell (R-Ky.) said Sunday that he is ready to move a bipartisan health-care bill but first needs clarity from President Trump on what he is willing to sign.
“What I’m waiting is to hear from President Trump what kind of health-care bill he might sign,” McConnell said in an interview on CNN’s “State of the Union.” “I think he hasn’t made a final decision. When he does, and I know that we’re not just debating it, but actually passing something to be signed, I would be happy to bring it up.”
The move to suspend federal enforcement of the insurance mandates is anathema to Democrats, who view the requirements as integral to the law’s success. All taxpayers must now provide proof of insurance coverage or face a penalty. The current fine is $695 per adult and $347.50 per child — up to $2,085 per family — or 2.5 percent of family income, whichever is greater. Employers with 50 or more full-time equivalent employees that do not offer coverage face a fine of about $188 per month for every full-time employee they have beyond the number 30. These businesses also face fines if federal officials determine that the plans they offer are unaffordable or provide inadequate coverage.
The White House is also interested in adding language to expand “association health plans,” a kind of insurance in which small businesses of a similar type band together as a group to negotiate health benefits. These plans have had to meet ACA coverage requirements, but the president has sought to use his authority to exempt them from those rules and allow these plans to be sold across state lines without separate insurance licenses.
The White House declined to comment immediately.
In a statement, Alexander said: “This is the normal legislative process with people of different views saying what they are for and against. Something close to the Alexander-Murray proposal is likely to become law this year because the President himself asked us to develop this short-term solution so people aren’t hurt by a chaotic insurance market.”
Senate Minority Leader Charles E. Schumer (D-N.Y.) said in a statement: “The administration was involved in the Alexander-Murray negotiations every step of the way. There is a broad bipartisan agreement that can pass the Senate right now. The administration should support it instead of floating other ideas that would further the sabotage both parties are trying to reverse.”
Insurers have described the mandates as critical to ensuring that enough healthy people buy coverage, which in turn translates into a broader risk pool. The Congressional Budget Office has estimated that repealing the individual mandate this year would mean 15 million fewer insured Americans by 2026, though several experts have questioned whether this requirement provides as powerful an incentive to sign up as the CBO has consistently estimated.
According to the Internal Revenue Service, 6.5 million taxpayers paid $3 billion in ACA penalties for not having insurance in 2016.
Larry Levitt, vice president for special initiatives at the Kaiser Family Foundation, said in an interview that while it is “hard to tease out how much of an effect the individual mandate has had” on coverage, removing it even for a year could prompt some insurers to exit the ACA market.
“This would be a classic poison pill,” Levitt said.
While Trump signed an executive order his first day in office instructing federal agencies to provide Americans with ACA relief, the IRS informed tax professionals this week that they need to provide proof of insurance with tax returns filed for 2017.
"The 2018 filing season will be the first time the IRS will not accept tax returns that omit this information," the IRS announced in its notice Tuesday.
Trump has sent mixed signals about the substance of the Alexander-Murray plan, which was released Tuesday. He seemed to embrace it at first, then backed away. In general, he has seemed supportive of trying to come up with a bipartisan deal of some kind.
Senate Democrats have been pushing their Republican counterparts to bring the plan as it was released Tuesday to the Senate floor for a vote. But GOP leaders have declined to commit to doing so.
Trump ended the Cost Sharing Reduction subsidy payments, known as CSRs, arguing that they were funded illegally. But he appears open to Congress passing a measure to appropriating funding for them — provided Republicans get adequate concessions from Democrats. The payments, which cover roughly 7 million consumers, would cost taxpayers about $7 billion in 2017 if they were funded through the end of the year.
The bipartisan measure won new support Thursday, giving it 12 Democratic senators and 12 Republican senators as sponsors.
But it remains far from clear that Alexander and Murray will be able to hash out a compromise that can win the support of most Republicans. Without majority support from his own ranks, Senate Majority Leader Mitch McConnell (R-Ky.) will not bring the bill up for a vote, Republicans close to the process predicted.
At the same time that the administration is negotiating with lawmakers, it is defending in federal court its decision to cut off the CSR payments. Attorneys general for 18 states and the District of Columbia are seeking a temporary restraining order in the U.S. District Court for the Northern District of California that would force the federal government to continue making the payments.
In a brief filed Friday, acting assistant attorney general Chad Readler filed a motion asking for the court to reject the plaintiffs’ motion for preliminary relief, saying their claims “have not demonstrated an imminent risk of irreparable harm” from the cutoff in payments and the public interest weighs “heavily against a judicial decree mandating the expenditure of hundreds of millions of dollars in unappropriated taxpayer dollars every month.”
On Saturday a coalition of 29 state and national consumer groups, led by Families USA and the National Health Law Program, filed an amicus brief in support of the plaintiffs.
The state attorneys general, meanwhile, argued that the halt in subsidies “has caused health insurance premiums across the country to skyrocket, in some cases by as much as 30% . . . Many will be unable to afford the higher insurance, and will abandon the health insurance market altogether. That will harm not only the States’ residents but the States themselves, which will be forced to spend billions more on health care costs when these uninsured residents seek emergency care at State-funded facilities.”
Lawyers for both sides will argue the case before U.S. District Judge Vince Chhabria in a hearing Monday.
Tory Newmyer contributed to this report.