The new bipartisan House proposal to fix Obamacare, explained

Republicans’ drive to repeal Obamacare with a strict party-line vote fell apart last week amid defections from three moderate senators and unified Democratic opposition.

A new bipartisan group is trying to fill the void they left with a new health care proposal of their own.

On Monday, the approximately 40 members of the House’s “Problem Solver” caucus — co-chaired by Reps. Tom Reed (R-NY) and Josh Gottheimer (D-NJ) — unveiled a plan to fix Obamacare marketplaces without dismantling its basic architecture.

Their plan calls for five new policies — the most important of which would give states money so they can help Obamacare enrollees afford their plans, presumably by giving more cash to insurers.

The new plan also calls for repealing two taxes — one on medical device manufacturers, and another that penalizes small businesses that do not offer their employees insurance.

If passed, the “Problem Solvers” package would likely drive down premiums and deductibles for Obamacare enrollees, said Larry Levitt, a health policy expert at the Kaiser Foundation. It would also remove the threat of millions losing their health insurance because of instability on the Obamacare exchanges, he said.

On the other hand, the plan contains no mechanism for seriously expanding coverage to the 28 million Americans who still lack it — and may even drive the number of uninsured people slightly higher.

That is, of course, assuming it can even get to the floor for a vote in the first place.

“I believe we have an opportunity to develop a health care bill from the center out, and there are members of both parties who want to work on something,” Rep. Charlie Dent (R-PA), chair of the moderate Republican Tuesday Group backing this plan, said in an interview last week. “The question is: Do the leaders in both parties and in both chambers want to join?”

As unveiled in the Problem Solvers’ plan, Congress would implement five main policies that combine some top Democratic priorities on health care with some top Republican ones. (Politico first reported news of the plan on Sunday.)

“Overall, I think it would keep insurers in the individual markets and reduce premiums,” Levitt said. “And I think it would avoid the potential of coverage losses, while also risking a modest loss in coverage from repealing the employer mandate.”

The first policy is ensuring that the government continues to make the cost-sharing reduction payments that President Donald Trump has threatened to cut off. The $8 billion CSR funds help make copays and deductibles cheaper for people who get insurance through Obamacare; if Trump followed through on his threat to stop those payments, the Obamacare markets might collapse.

This proposal from the Problem Solvers would mandate that those payments get made. If not, as Vox’s Sarah Kliff explains, “the people who will get hurt are Obamacare enrollees themselves, who will face higher premiums in the individual market” if Trump follows through on his threat.

The second policy in the plan is to create a “dedicated stability fund” for states to lower premiums and limit losses for insurers. As Politico notes, versions of this idea were included in both the House and Senate proposals for Obamacare repeal.

The draft of the plan doesn’t specify exactly how this stability fund would be used, but Levitt expected it to be roughly similar to the reinsurance plan being pushed by Senate Democrats like Sen. Tim Kaine (D-VA), which would give insurers extra funding to cover their most expensive patients — and thus hold down premiums for the rest.

“This is what insurers and insurance regulators have been asking for: Fund the CSRs so there’s no more doubt about it, and create some kind of reinsurance program,” said Timothy Jost, a health expert at Washington and Lee.

The third policy would exempt small businesses from the “employer mandate,” which levies a tax against employers that don’t provide health insurance to their employees.

Currently, the tax applies to any business with more than 50 employees. The “Problem Solver” proposal would raise that number so it only applied to businesses with more than 500 employees.

This is the part of the plan most likely to meet resistance from Democrats in Congress. On Sunday, MoveOn.org’s Ben Wikler noted on Twitter that the provision may be more likely to reduce the number of Americans who are insured rather than increasing it, since small businesses wouldn’t have to cover their employees. However, a recent analysis by the centrist think tank the Urban Institute argued repealing the mandate would have “little impact on insurance coverage,” while also noting that it’s wildly unpopular with conservatives.

Levitt comes down somewhere in the middle. “The vast majority of the employers affected by it were already providing health benefits,” he notes. “It’s had some effect on the margins in some industries by covering low-wage and low-skilled workers and extended some health benefits to employees.”

The last two proposals in the plan are the most modest. One is the repeal of the medical device tax — a tax on things like pacemakers and hip implants that manufacturers have spent millions in lobbying and political contributions trying to kill.

The other is that the plan would “provide technical changes and clear guidelines” to allow insurers to sell across state lines. The ACA technically allowed insurers to sell across state lines, but the federal government never issued regulations to set up this plan.

Levitt notes that the impact of such a policy would likely be modest, since the major barrier to insurers selling across state lines remain the difficulty of creating a network of doctors and providers spanning multiple states.

In broad scope, the Problem Solver plan resembles other proposed fixes to the ACA, like one released by the Center for American Progress to increase reinsurance.

“This is what you’d expect bipartisan health care reform to look like,” Levitt said.

And Democrats signing up for the effort are praising the idea of a bipartisan fix. “For too long, health care has been viewed as a fiercely partisan battleground,” Gottheimer, the Democratic co-chair of the Problem Solvers, said in a statement. “We all heard what John McCain said — it’s time for bipartisan solutions.”

Still, it’s far from clear whether this new push has enough momentum to overcome partisan gridlock.

The members of Congress rallying behind the plan note that they’d need House Speaker Paul Ryan to be willing to bring the proposal to a vote. “You’ll need leadership cooperation at some point, without question,” Dent told me. “At some point you’d need at least some leadership buy-in, though it’s important we work and develop something first before presenting it to them.”

Moreover, as Vox’s Tara Golshan reported, House conservatives are continuing to plot a path forward for something close to repealing Obamacare. Ryan has said that Republicans “should not give up” on doing so.

Meanwhile, Democratic members of Congress have increasingly rallied behind achieving universal health care through a single-payer health care system. The Problem Solver policies may face criticism from the left for not going far enough.

”There are good and bad parts of this proposal. Pouring more subsidies into the market to bring down the direct costs shouldered by consumers is a step in the right direction,” said Matt Bruenig, an analyst at the left-wing think tank the People’s Policy Project.

But, he added, “tweaking around the edges like this will still leave tens of millions of people uninsured, tens of millions more underinsured, and many individual health insurance markets with one or even no insurance options. The only way to solve the big problems in our health care system is through universal public insurance.”

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