President Trump recently announced that he was pulling the plug on $7 billion a year in federal cost-sharing subsidies to insurance companies selling individual policies to lower-income Americans, but today a pair of influential senators announced a bipartisan compromise that, if approved, would restore those payments for two years, while also giving states more flexibility with rules under the current law.

These subsidies, which are paid out monthly by the federal government, are part of the 2010 Affordable Care Act and are intended to keep out-of-pocket expenses — like co-pays and deductibles — low, particularly for Americans making between 100% and 250% of the federal poverty line.

Trump had ridiculed these payments as “bailouts” for the insurance industry, and had repeatedly threatened to cut them off, which insurers and other critics said would have the immediate effect of destabilizing the individual insurance market.

On Oct. 12, only hours after he signed an executive order undermining other key aspects of the Affordable Care Act, the President released a one-paragraph statement directing that the payments come to a halt.

If the payments were to end, it’s expected that many insurance companies would flee the individual marketplace in 2018 and that premiums would continue to soar. Rates for 2018, which were recently locked in, had already been increased in expectation of the White House ending these subsidies.

But this afternoon, Sen. Lamar Alexander (TN) and Sen. Patty Murray (WA) — the Republican and Democratic heads, respectively, of the Senate Health, Education, Labor, & Pensions Committee — announced they had ironed out a deal that would preserve the payments for two more years.

The compromise also reportedly includes additional flexibility in what’s known as the Section 1332 waiver program, which allows states to apply for innovation wavers. Under a 1332 waiver, any tweaks a state makes to its insurance requirements must result in insurance that is just as comprehensive and as affordable as what would be available without the waiver; in other words, it can’t be used to make insurance worse in a state.

Alexander told reporters this afternoon that the proposed change to the 1332 waivers would both speed up the review process for each waiver request and loosen the threshold to “comparable affordability,” meaning a waiver could open the door to insurance that is more expensive than what would be purchased without the waiver.

The senators claim that the change to the waiver program will not — as was proposed by GOP lawmakers multiple times during the failed repeal and replace legislative efforts — allow states to opt of requiring that insurance carriers cover the ACA’s list of mandatory Essential Health Benefits.

In an apparent effort to make insurance more affordable for some, the bill proposes letting Americans over the age of 30 buy catastrophic insurance plans — aka “copper” plans — that cost less but also provide less coverage for general health maintenance.

Politico reports that the bill adds $106 million back into support for ACA enrollment. The Trump administration recently gutted funding for the upcoming enrollment period, which has also been cut in half.

The Alexander-Murray legislation has not been finalized, but Murray told reporters this afternoon that the final details are being ironed out and that she’s “very optimistic” that it will move forward.

If the compromise does make it to the Senate floor, it would be first bipartisan piece of health insurance reform to do so. Unlike the unsuccessful repeal bills, this legislation could pass without full support from either party.

Right now, some GOP lawmakers are being cautiously supportive of the proposed compromise. Sen. John Thune (SD) said today that, from what he’s seen of the bill, it “is something I think will attract a good number of votes for people who want to see a near-term solution that ensures stability in the markets and enables and sets up a debate down the road.”

While some more hardline conservatives are already opposing the proposal, claiming that they won’t stand for anything other than full repeal of the ACA.

“The GOP should focus on repealing & replacing Obamacare, not trying to save it,” Tweeted Rep. Mark Walker (NC), head of the conservative Republican Study caucus. “This bailout is unacceptable.”

One big question that remains to be answered is whether Senate leadership will make time for this bill to be considered in the coming weeks, or if it will be delayed until after Congress has dealt with other matters, like tax reform.

While legislators move forward with this possible compromise, several states are currently suing the Trump administration in the hope of restoring the subsidies. They argue that the President doesn’t have the authority to cut off these payments on a whim, and that he is violating the Take Care clause of the Constitution by not faithfully executing the laws of the country.

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