Going into the last week in session before Christmas break, House Republicans are in a rush to pass premium-slashing legislation to counter Democrat-led efforts to extend enhanced premium tax credit levels set in place under ...Joe Biden.

Republicans, arguing that these tax credits are expensive, prone to fraud, and inflationary, are now trying to advance their policy alternative as the credits are set to expire at the end of the year.

What's in and What's Out?

The Republican bill is not a highly ambitious repeal, reform, or restructuring of Obamacare. Rather, it is a bundle of focused tweaks to the health insurance system that aims to lower health care costs, instead of the government's current strategy, which has been to have government subsidize an increasingly unaffordable health care system.

The bill's lack of highly controversial provisions is by design, as Republicans will need to rally their narrow majority in the House and pick up at least seven Democrat votes in the Senate to have any chance of the bill reaching the president's desk before the credit expiration date.

Many of the Republican proposals debated in recent weeks have involved setting up flexible health savings accounts as a replacement for the enhanced premium tax credits.

The House bill left those flexible health savings accounts out, however.

A House Republican leadership aide told The Daily Signal that they remain open to this idea in the future, but that their "bills right now, I think, have a real strong consensus, and again, lower premiums for all Americans."

The biggest change in the bill is the appropriation of Treasury funding toward cost-sharing reductions, a part of Obamacare.

In theory, CSRs involve insurers being required to offer cheaper copays and deductibles to consumers for out-of-pocket expenses, for which the federal government reimburses them.

Under Obama, funding for CSRs was originally provided directly from the executive branch to insurers, without explicit Congressional approval. This practice faced a Republican-backed court challenge before finally being cut off in 2017 during President Donald Trump's first term.

This change led to what is called "silver loading," as insurers increased premiums on the Obamacare silver-level plan in order to make up for no longer being reimbursed for offering the legally mandated cheaper copays and deductibles.

Proponents say that renewing funding for CSRs is that it will effectively end silver loading, thereby lowering premiums substantially.

Additionally, although counterintuitive, funding CSRs is likely to reduce the federal deficit, per the Congressional Budget Office, a nonpartisan budgetary analysis office funded by Congress.

This is due to the fact that higher premiums from silver loading have automatically increased the deficit costs from premium tax credits, which cover a set percentage of premiums for each income level.

Thus, despite the fact that the bill's most important provision is a subsidization of a tenet of Obamacare, its deficit-cutting effect could prevent it from upsetting House fiscal hawks, many of whom entered politics as crusaders against Obamacare and the national debt.

Mountain-High Procedural Hurdles

The bill does not include any extension of the enhanced premium tax credits—possibly a disappointment to moderate House Republicans in swing districts, who have been calling for a short-term extension.

Some moderate Republicans have signed on to efforts to extend the tax credits that Democrats shut the government down over in October.

Now, moderates are expected to put on somewhat of a political show. Republican moderates will likely be allowed to propose an amendment to extend the credits in some form, but the House's "Cut as You Go" rule prohibits the adoption of amendments whose mandatory spending is expected to produce a net increase in deficits over either a six or 11-year fiscal period. (Screengrab image: via C-SPAN)

Thus, any proposed amendment would likely have to include massive offsetting provisions reducing mandatory spending to make up for projected lost revenue from extending the credits.

Before a bill comes to the House floor, it makes a stop at the House Rules Committee, where committee members set the terms for debate of the measure. 

On Tuesday, moderates are expected to bring forth their amendment in rules committee, but it is unclear how they might tweak it to make it viable.

The question facing House leadership is whether or not GOP moderates stay on board with the bill if they do not extend the credits.

The big danger for Republicans is that more Republican members will get behind discharge petitions looking to force a vote on extending the credits.

Separate discharge petitions from Rep. Brian Fitzpatrick, R-PA, and Rep. Josh Gottheimer, D-NJ, would force votes on a two-year extension. House Minority Leader Hakeem Jeffries, D-NY, has his own petition for a three-year extension.

The success of any one of these petitions would be a setback for the Republican effort to counter Democrats on the premium affordability issue. And if Republicans lose this political battle, the midterms could be messy. Subscribe for free to Breaking Christian News here

George Caldwell is a journalism fellow at The Daily Signal.

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