Chipping away at Obamacare: The endgame in D.C.

This post has been updated, as noted below.

The 2010 Patient Protection and Affordable Care Act, a.k.a. Obamacare, remains an issue in the endgame over ending the latest fiscal crisis in Washington -- just not a major one. But of course, the House and Senate disagree on what tweaks to make to the law that tea party-affiliated Republicans were so eager to defund.

In a nutshell, labor unions appear to have more clout in the Democratic-controlled Senate than the makers of stents and prosthetic limbs. But the chips fall the other way in the Republican-controlled House.

[Updated, 2:45 p.m. Oct. 15: As the day wore on, medical device makers lost the support of House Republicans too. More on that later.]

The emerging Senate deal to reopen the government and raise the debt ceiling would delay for a year a fee the 2010 heathcare law imposes on employers, unions and insurers that provide health plans. The $63-per-person fee, which was scheduled to be collected in 2014, 2015 and 2016, would have raised money for a reinsurance pool for insurers in the individual market that wound up with unusually costly customers.

PHOTOS: Protesting Obama at the “Million Vet March�

That’s a real possibility next year because the law requires insurers to accept all applicants and ignore preexisting conditions and medical histories when determining a customer’s premiums. The reinsurance pool was designed to cushion insurers against excessive risk so that they wouldn’t set their premiums high enough to guard against a worst-case scenario. And the aid is intended to be transitional, expiring after three years.

Put more simply, the point was to have every insured person put a little money into the pool to help make insurance available to everyone, including those whom insurers have shunned in the past. But organized labor and some employers complained that it was expensive and unfair to hit them with the fee.

The tentative Senate proposal, according to an insurance industry source who declined to be quoted, would still collect $25 billion in fees from unions, employers and other providers of health insurance. But the fees would be assessed from 2015 through 2017. The reinsurance pool would still support insurers from 2014 through 2016, with the government covering the costs in the first year and recovering the money in 2017.

The Senate proposal is not expected to cancel a 2.3% sales tax on medical devices that went into effect this year, as House Republicans and some of their Senate colleagues had sought. The tax, which offsets part of the cost of the 2010 healthcare law, is broadly opposed by members from both parties. But some Democrats worry that canceling it would lead other interest groups taxed by the 2010 law to seek the same relief.

It is expected, however, to include a requirement that the federal government verify the eligibility of those seeking subsidized health plans through the new state exchanges. Federal regulations already require exchanges to do so, but critics have persisted in arguing that the exchanges won’t verify eligibility at all, inviting massive fraud.

The proposal floated by the House GOP leadership, meanwhile, would delay the tax on medical devices for two years. That’s a concession of sorts; the House had previously sought to revoke the tax outright. But it also has drawn a veto threat from the White House, along with accusations from Democrats that the GOP leadership is trying to force the government into some form of default.

[Updated, 2:45 p.m. Oct. 15: Under pressure from the tea party wing, House leaders dropped the proposed delay in the medical device tax from the stopgap funding bill filed Tuesday afternoon. According to Robert Costa of The National Review, critics of the provision said it smacked of crony capitalism.]

The Treasury has said that unless the debt limit is raised by Thursday, it won’t have enough money to pay the government’s bills.

The House proposal has one other Obamacare-related provision: a prohibition on lawmakers, the president and top administration officials receiving government subsidies for any insurance plan purchased through the new exchanges. This is a bit of red meat for the crowd that thinks lawmakers are constantly exempting themselves from the rules they set for the rest of the country, but it’s more benign than previous versions of the proposal.

Under the 2010 law, members of Congress and their office staff have to buy insurance through one of the new exchanges, rather than receiving group health benefits through the Federal Employee Health Benefit Plan. (No such mandate was imposed on the executive branch.) The Office of Personnel Management ruled in late September that lawmakers and aides could purchase plans through the District of Columbia’s exchange for small employers -- even though Congress doesn’t come close to meeting the definition -- with the federal government continuing to cover about 75% of the cost of the insurance.

The ruling was a legal stretch, but it wasn’t an outrage; the 2010 law explicitly says the government can provide insurance to lawmakers and their staff, they just have to shop for it on an exchange. And only the small-employer exchanges are set up to cater to employers, not individuals.

The House GOP’s tentative plan would overrule the ruling, but only in part. Unlike some earlier proposals, it would let the government continue to cover most of the cost of the health plans obtained by congressional aides. It would still amount to a pay cut for members of Congress, just not for the people they employ.

[Updated, 2:45 p.m. Oct. 15: The tea party wing wasn’t satisfied with the original proposal, so the final version adds congressional staff to the list of those losing the employer contribution to their insurance costs.]

ALSO:

A healthcare history lesson for the GOP

Ending the government shutdown by scheduling a new crisis

Tea party wants to take America back -- to the 18th century

Follow Jon Healey on Twitter @jcahealey and Google+