Senate Races To Resurrect Obamacare Subsidies – With New Caps, Fees And Fines

Washington’s bipartisan dealmakers are inching toward reviving lapsed Obamacare subsidies – but this time with tighter strings attached.

A cross-party group of roughly a dozen senators is close to finalizing an agreement that would restore enhanced Affordable Care Act tax credits that expired Jan. 1, according to negotiators familiar with the talks. Draft legislative text could be released as early as Monday.

“We could realistically be there, probably Monday,” said Sen. Bernie Moreno (R-ME), a key Republican negotiator, speaking Wednesday.

The developing deal would extend the subsidies for two years, while imposing new restrictions designed to limit eligibility and curb abuses. Among the changes under discussion: income caps that would cut off subsidies for households earning more than roughly 700% of the federal poverty level, and a new requirement that enrollees pay at least $5 per month toward their premiums.

Senators are also weighing tougher enforcement against insurers accused of enrolling people in subsidized coverage without their knowledge. Under the proposal, insurance companies that add so-called “phantom enrollees” could face steep new fines.

Sen. Susan Collins (R-ME) said she was “encouraged” by the group’s progress and agreed that a deal appears close. Two people granted anonymity to discuss the private negotiations likewise described the talks as nearing a conclusion.

The package wouldn’t stop at subsidies. Negotiators are also discussing new cost-sharing reduction measures and expanded access to health savings accounts. According to Moreno, Americans receiving Obamacare subsidies would have the option in the second year of the extension to divert that money into a pre-funded health savings account instead.

Still, the path to passage remains uncertain.

Even if the Senate group locks in an agreement, there’s no guarantee it can muster the votes to get the bill through Congress. Lawmakers have been keeping party leadership informed and are scheduled to brief House members on the proposal later this week.

Not everyone involved is convinced the finish line is near.

Sen. Dick Durbin (D-IL) cautioned that there are “still some major stumbling blocks” left to resolve.

One unresolved flashpoint is abortion. Moreno declined to say how negotiators would address concerns that the tax credits could indirectly subsidize abortion coverage. He insisted the framework, as described, would not alter existing policy and said abortion remains a “peripheral” issue in the talks.

“We’re trying to resolve how we ensure compliance with the spirit” of the Hyde Amendment, Moreno said, referring to the long-standing restriction barring taxpayer funding for abortions.

For now, senators are racing the calendar — and their own internal divisions — to see whether a bipartisan Obamacare revival can survive its latest rewrite.