CBO estimated that it's already too late for the bill to impact 2018 premiums as Sens. Patty Murray and Lamar Alexander had originally hoped. | Mark Wilson/Getty Images CBO: Bipartisan Obamacare bill would cut deficit, keep coverage stable

A bipartisan bill to stabilize Obamacare would cut the federal deficit by $3.8 billion but wouldn't do much to change health insurance premiums for 2018, according to a new analysis by the Congressional Budget Office. It would not substantially change the number of people who are covered.

The report is about the bipartisan bill negotiated by Sens. Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.) which has broad support in the Senate but is unlikely to get a swift vote given opposition from President Donald Trump as well as from House Republicans.


CBO said Wednesday the savings calculated over a decade would stem in part from letting states offer so-called copper plans — or lower-cost policies that appeal to healthier enrollees in the Obamacare markets. Those plans would attract younger people into the market starting in 2019, the agency projected, prompting insurers to slightly lower their premiums over the long term and save the government a little more than $1 billion in subsidy funding over the next 10 years.

The federal government would also save money by funding Obamacare's cost sharing subsidies for two years, preventing it from having to pay insurers more to cover separate subsidies tied to rising premiums. Those subsidies — the center of a court battle and ongoing partisan conflict — help cover medical bills for lower income enrollees. Trump recently cut them off, but Congress could resume them, either through legislation like the Alexander-Murray bill or through a big year-end spending bill.

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Insurers raised their premiums for 2018 to cover the cost of those subsidies — which the health plans have to pay under the health law whether or not they get paid out by the government. If the legislation passed and the subsidies were paid, CBO projected that insurers would pay $3.1 billion in rebates to individuals and the government, to account for premium hikes originally designed to cover those costs.

The CBO found there is no additional cost to Congress appropriating money for that cost-sharing program because the spending has been done in the past.

“This nonpartisan analysis shows that our bill provides savings and ensures that funding two years of cost-sharing payments will benefit taxpayers and low-income Americans, not insurance companies,” Alexander and Murray said in a joint statement.

Skeptics including Trump have criticized the bipartisan effort as “bailing out” insurers by funding the cost-sharing program. The bill's supporters had hoped to enact it before enrollment opens on Nov. 1, but action on subsidies is not likely until the end of the year.

The CBO in its report confirmed that it's already too late for the bill to affect 2018 premiums. But the agency said it would help keep rates steady in 2019.

The Alexander-Murray bill would also give states more flexibility to customize their Obamacare markets through federal waivers. But CBO said that it’s unclear how that would affect the deficit, given uncertainty about how states might take advantage of those provisions.

