Lamar Alexander spearheads deal to continue Obamacare health insurance subsidy payments

(Photo: WKRN)

WASHINGTON (ABC News) – Less than a week after President Donald Trump signed an executive order to halt government payments that subsidize insurance plans for low-income Americans, Senate leaders agreed in principle to a bill that would cover the payments for two years.

Sen. Lamar Alexander, R-Tenn., the chairman of the Senate Health, Education, Labor and Pensions Committee, announced Tuesday that he reached an agreement with Sen. Patty Murray, D-Wash., the committee’s ranking member. The senators each made brief presentations on the deal at lunches with colleagues from their respective parties.

According to one source with knowledge of the bill, the agreement contains $160 million to restore outreach and enrollment funding for the Affordable Care Act.

After first portraying the subsidies as “money that goes to the insurance companies to line their pockets” and “raise up their stock prices,” at a joint press conference with Greek Prime Minister Alexis Tsipras Tuesday afternoon, Trump applauded the prospect of a deal, though hedged that it was a “short-term solution.”

“It will get us over this intermediate hump,” said Trump, adding that Republicans have or “are very close to having” the votes to pass a comprehensive bill to overhaul the ACA — a long-held party goal.

Last week he criticized such payments to insurance companies. On Tuesday he called a possible time without the subsidies as a “dangerous little period.” Experts, including the Congressional Budget Office, projected that halting the government contributions would raise premiums, increase the federal deficit and destabilize the insurance marketplace.

The cost to continue the cost-sharing-reduction payments (CSRs), which are distributed in monthly installments, was estimated at $7 billion this year. The White House claimed last week that it was “unlawful” to continue the payments as an appropriation for the funds had not been made by Congress, and that it constituted a “bailout of insurance companies.”

Many Republicans, while acknowledging the potential harm that would be incurred by ending the subsidies, have echoed the White House’s stance, including Speaker of the House Paul Ryan, R-Wis. who said last week that “the power of the purse belongs to Congress.”

Alexander told reporters Monday that Trump called him over the weekend to encourage a “bipartisan agreement” with Murray. He also said that the president spoke with him the previous weekend as well and that Senate Minority Leader Chuck Schumer of New York was involved in pushing for a deal.

After news of the agreement emerged Tuesday, Democratic senators, including Schumer and Murray, characterized the outcome as a positive step.

“We think it’s a good solution,” Schumer said. “And it got broad support when [Murray] and I talked about it at the caucus lunch today.”

“I’m really glad that Democrats and Republicans agree [stopping the payments is] unacceptable and that the uncertainty and dysfunction cannot continue,” Murray added.

Sen. Alexander’s full remarks on the Senate floor are available here.