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– A bipartisan deal in the U.S. Senate could let Minnesota hold down insurance costs on the state exchange without sacrificing millions of dollars in federal funding for low-income health care.

Republican and Democratic members of the Senate health committee agreed Tuesday to legislation that would shore up the Affordable Care Act, secure another two years’ worth of federal subsidies to help consumers pay their insurance deductibles, and restore hundreds of millions of dollars to MinnesotaCare.

“The bill’s truly a compromise and no compromise is perfect. But we got a lot of good stuff in it and I’m very happy with it,” said U.S. Sen. Al Franken, D-Minn., who serves on the Senate Health, Education, Labor and Pensions Committee.

If Congress doesn’t act, MinnesotaCare could lose an estimated $742 million in federal funding over the next four years. MinnesotaCare is the state’s basic health program, and provides coverage to almost 100,000 Minnesotans in need.

State Human Services Commissioner Emily Piper said she was “encouraged” by the proposal to restore full MinnesotaCare funding.

“In the last month, our MinnesotaCare program’s federal financing has been under repeated attack by administrative decisions made by President Trump and the Department of Health and Human Services,” she said in a statement. “I urge Congress to work across party lines to ensure health care coverage for these working families and for our Minnesota legislative leadership to do so as well.”

Minnesota was doing just what the Trump administration had encouraged states to do — flex ACA guidelines to come up with solutions that worked for the state. State lawmakers passed a bipartisan reinsurance plan that would pump $549 million into the state’s individual market exchange to fend off double-digit rate hikes.

But the state got a nasty shock when it applied for a federal waiver for its plan. The Centers for Medicare and Medicaid ruled that lower insurance rates on the state exchange would also lower the amount of funding the state gets for MinnesotaCare.

“We got thrown a real curveball,” Franken said, adding that Minnesota’s waiver woes were part of the debate as the ranking members of the Senate heath committee — Lamar Alexander, R-Tenn., and Patty Murray, D-Wash., — tried to come up with an ACA fix before this year’s enrollment period closes.

“They want to encourage things like what Minnesota did,” said Sen. Amy Klobuchar, D-Minn., who joined the discussions with Alexander and Murray. “What we did was set a path for other states to do the same thing, and if you cut us off, you cut off other states.”

The proposed legislation clarifies that lowering premiums in state insurance marketplaces won’t lower federal health care subsidies elsewhere in the budget.

“They wanted to allow more flexibility — reasonable flexibility,” Klobuchar said. “If you said to Minnesota, ‘No, we’re going to punish you for that,’ as appeared to be happening if we didn’t get this provision in, that would have been bad for the whole country.”

President Trump signaled his support for the compromise Tuesday. Both Minnesota senators said they were optimistic that the bipartisan bill could be brought to the Senate floor for a vote quickly.

“We’re going to get it to the floor somehow,” Franken said. “I think we are going to be able to get Republican support. So I think it will get to the floor and we will get this done.”

Jennifer Brooks • 202-662-7452