“Senate Majority Leader Mitch McConnell was handed devastating news Monday evening just hours after the Senate was gaveled back into session: Two more defections on his health care bill.
The dramatic and simultaneous announcement from Sens. Jerry Moran of Kansas and Mike Lee of Utah means McConnell officially does not have the votes to even begin debate on his legislation to overhaul the Affordable Care Act — and that the Republican Party’s years-long quest to kill former President Barack Obama’s legacy accomplishment is, for the time being, halted without a path forward….
“We should not put our stamp of approval on bad policy. Furthermore, if we leave the federal government in control of everyday healthcare decisions, it is more likely that our healthcare system will devolve into a single-payer system, which would require a massive federal spending increase,” Moran said in a statement.” (A)
Senate minority leader New York Sen. Charles Schumer said in a statement that the “second failure of Trumpcare is proof positive” that the bill is “unworkable.”
“Rather than repeating the same failed, partisan process yet again, Republicans should start from scratch and work with Democrats on a bill that lowers premiums, provides long term stability to the markets and improves our health care system,” Schumer said. (B)
“With four solid votes against the bill, Republican leaders were faced with two options: go back and try to rewrite the bill in a way that could secure 50 Republican votes, a seeming impossibility at this point, or do as Senator Mitch McConnell, the Republican leader, had promised and team with Democrats to draft a narrower, bipartisan measure to fix the flaws in the Affordable Care Act that both parties acknowledge.”(C)
(A) Latest health care bill collapses following Moran, Lee defections, by MJ Lee, Phil Mattingly and Ted Barrett, http://www.cnn.com/2017/07/17/politics/health-care-motion-to-proceed-jerry-moran-mike-lee/index.html
(B) More GOP Senators Say No, Killing Chances For Republican Health Care Bill, by Scott Neuman, http://www.npr.org/sections/thetwo-way/2017/07/17/537803874/gop-senators-come-out-against-republican-healthcare-bill-ensuring-it-cant-pass
(C) Health Care Overhaul Collapses as Two More Republican Senators Defect, by Thomas Kaplan and Robert Pear, https://www.nytimes.com/2017/07/17/us/politics/health-care-overhaul-collapses-as-two-republican-senators-defect.html
Last week he also said:
“Introduce a bill,” McCain said. “Bring it to the floor. Vote on it. That’s the normal process, and if you shut out the adversary or the opposite party, you’re going to end up the same way Obamacare did when they rammed it through with 60 votes. Only guess what? We don’t have 60 votes.” (B)
“Senate Majority Leader Mitch McConnell announced Saturday that the Senate will delay consideration of the Republican health care bill while Sen. John McCain recovers from surgery for a blood clot.
McConnell tweeted that the Senate will work on other legislative issues and nominations next week and “will defer consideration of the Better Care Act” while McCain is recovering. McCain’s absence would have imperiled the bill, which needs the support of 50 of 52 GOP senators to advance.
Two Republican senators — Susan Collins of Maine and Rand Paul of Kentucky — have already said they will not support a motion to proceed to floor debate on the legislation.”
With Senator John McCain’s absence, Republicans would have only 49 votes to move ahead with the legislation; all Democrats and the two independent senators oppose it. (C)
What is JUNK INSURANCE?
“As Senate Republican leaders struggle to secure enough votes to repeal and replace the health law, the centerpiece of their effort to win conservative support is a provision that would allow insurers to sell such bare-bones plans again. The new version of the bill released on Thursday incorporates an idea from Senator Ted Cruz of Texas that would permit insurers to market all types of plans as long as they offer ones that comply with Affordable Care Act standards. The measure would also allow companies to take into account people’s health status in determining whether to insure them and at what price.
State insurance regulators say the proposal harks back to the days when insurance companies, even household names like Aetna and Blue Cross, sold policies so skimpy they could hardly be called coverage at all. Derided as “junk insurance,” the plans had very low premiums but often came with five-figure deductibles. Many failed to pay for medical care that is now deemed essential…
The Affordable Care Act drastically changed the health insurance landscape by requiring insurers to offer a set of comprehensive benefits — including hospitalization, doctor visits, prescription drugs, maternity care and mental health and substance abuse treatment — in order to formally qualify as insurance. “The new bill opens the door to junk insurance,” said Dave Jones, the California insurance commissioner.” (D)
WILL SENATOR McCAIN “WALK THE WALK” OR LIKE MOST SENATORS OF BOTH PARTIES JUST “TALK THE TALK?”
(A) McCain: Senate healthcare deal could be reached by Friday ‘if pigs fly’, by Mallory Shelbourne, http://thehill.com/homenews/senate/339934-mccain-senate-healthcare-deal-could-be-reached-by-friday-if-pigs-fly
(B) McCain: GOP health care bill ‘probably’ will die, by Eli Watkins, http://www.cnn.com/2017/07/09/politics/john-mccain-health-care/index.html
(C) McConnell delays health care vote while McCain recovers from surgery, by Phil Mattingly, Manu Raju and Steve Almasy, http://www.cnn.com/2017/07/15/politics/john-mccain-blood-clot/index.html
(D) In Clash Over Health Bill, a Growing Fear of ‘Junk Insurance’, by Reed Abelson, https://www.nytimes.com/2017/07/15/health/senate-health-care-obamacare.html
Republic Party Talking Points (A)
The Better Care Reconciliation Act is only one step in a three step process to replace the Affordable Care Act and lower healthcare costs. Step two includes administrative actions, by the Department of Health and Human Services Secretary, that will make regulatory reforms to the health insurance market. Step three includes additional healthcare legislation that cannot be done through the reconciliation process.
FACTS ABOUT THE REVISED BETTER CARE RECONCILIATION ACT:
Lowers health insurance premiums by 30% by 2020, compared to Affordable Care Act projections.
Requires continued coverage for people with preexisting conditions.
Allows dependents to stay on their parents health policies until age 26.
Dedicates $132 billion, over 8 years, to encourage states to assist low-income individuals to purchase health insurance.
Impacts Members of Congress healthcare just like all Americans.
Allows insurers to offer cheaper plans with less coverage options.
Does not make any changes from current law to annual lifetime coverage limits.
Does not cut Medicaid. Funding for Medicaid would continue to grow, yet not at the steep, beyond-inflation growth that is projected over the next 10 years. In fact, under the BCRA, spending on Medicaid in 2026 will increase to $466 billion, a 26 percent increase from now.
Provides state Governors with more flexibility in how their Medicaid system provides healthcare to those who are eligible.
Provides assistance for low-income Americans by offering health insurance subsidy assistance for Americans in the 0% to 350% federal poverty level range. This would also benefit the approximately 82,000 Oklahomans in the “coverage gap.” This tax subsidy will expand healthcare access and choice for low-income Americans, because they can transition from Medicaid to private insurance, with the help of tax subsides.
Eliminates the individual and employer mandates penalties.
Makes no changes to Medicare (which is the primary source of health coverage for Americans 65 and older).
Protects against an “age tax” by limiting what older, middle-income Americans pay toward the purchase of health insurance, to ensure they have access to a plan that fits within their financial means.
Helps rural hopsitals by restoring Affordable Care Act cuts to Medicaid Disproportionate Share Hospitals (DSH), which helps non-expansion states pay hospitals an enhanced Medicaid payment to care for its safety net population.
Allows people to use their pre-tax Health Savings Accounts (HSAs) to pay for their health insurance premiums.
Creates a Medicaid special exemption for disabled children from the per capita caps, which guarantees children with medically complex disabilities will continue to be covered through Medicaid.
Will not include any changes from current law to the net investment income tax, the additional Medicare Health Insurance (HI) Tax, or the remuneration tax on executive compensation for certain health insurance executives.
Democratic Party response (B)
Washington—Senator Dianne Feinstein (D-Calif.) today released the following statement in reaction to the Senate Republican health care bill:
“Senate Republicans spent the past two weeks putting lipstick on a pig. In all the ways that matter, the health care bill unveiled today is the same atrocious bill they couldn’t pass two weeks ago.
“The bill would still take coverage from tens of millions. It would still gut Medicaid. It would still increase premiums, particularly for older Americans. It would still undermine protections for pre-existing conditions.
“Once again, this bill was written behind closed doors. There will be no hearings. There will be no markups. There will be no opportunity for senators to amend the bill or understand the views of the millions who would be affected by it.
“Democrats will do all we can to ensure the American people understand that this bad bill is no better than the previous bad bills.”
Just as with earlier versions, the latest iteration of the Senate’s Affordable Care Act repeal bill would devastate insurance coverage, gut the Medicaid program, and dramatically increase deductibles and out of pocket costs.
The newest repeal bill:
leaves in place enormous cuts to Medicaid and ends the Medicaid expansion;
ensures that millions of low-income workers will lose health coverage and that those left on Medicaid will be enrolled in a hollowed out program with funding reduced by 35% over time;
continues to allow states to eliminate the essential health benefits and minimum coverage requirements that are core protections for people with pre-existing conditions and goes a lot further in this damaging direction, imposing a new structure—thought up by Senator Ted Cruz—that further erodes pre-existing conditions protections;
continues to cut financial assistance for private coverage and eliminates all assistance with out-of-pocket costs like deductibles;
increases deductibles for working lower- and middle-income families across all ages by an average of close to $5,000;
still increases premiums for older people by hundreds to thousands of dollars on top of these new higher deductibles;
still institutes an age tax on premiums, allowing insurers to charge older people five times the premium of younger people;
still provides billions of dollars in tax cuts to the wealthy and corporations.
So what has changed?
Fewer protections for pre-ex
Shifts Medicaid funds into poorly defined block grants
A small substance abuse grant fund as a token offset to much larger Medicaid cuts
Lessens tax cuts but still benefits corporations and the wealthy
These changes largely make the profound problems in previous versions of the Senate bill worse. They will formally divide the market for individual health insurance into plans for people with pre-existing conditions and for healthier people. They offset huge cuts to Medicaid and the regulated individual health insurance market with small expansions in Medicaid block grants and substance use grants and a stabilization fund that goes direct to insurance companies.
(A) Senator Lankford Statement on Revised Senate Healthcare Bill, https://www.lankford.senate.gov/news/press-releases/senator-lankford-statement-on-revised-senate-healthcare-bill
(B) Feinstein Statement on Senate Health Care Bill, https://www.feinstein.senate.gov/public/index.cfm/press-releases?ID=E83D14CD-9BA0-4B97-B0F0-9C5EAE30F1C2
(C) Latest Version of Senate Health Care Bill Fundamentally the Same as Previous Versions, http://familiesusa.org/blog/2017/07/latest-version-senate-health-care-bill-fundamentally-same-previous-versions
“Overall, the new version of the bill made broad concessions to conservative Republicans who had maintained that the initial draft left too much of the Affordable Care Act in place. Mr. McConnell then backfilled the bill with money intended to placate moderates. That jury-rigging of the bill left neither side completely satisfied.” (A)
“The new bill includes major changes to the original. One of the most significant was the inclusion of an amendment by Texas Sen. Ted Cruz, which would allow insurers offering Obamacare plans to also offer cheaper, bare-bones policies. The amendment was included in an effort to earn more conservative support, but could also drive away some moderates who fear the amendment could drive up premiums for those with pre-existing conditions.
It also contains significant new funding for opioid treatment and money for states meant to lower premiums for high-cost enrollees. But it would keep two Obamacare-era taxes on the wealthy and maintains significant cuts to Medicaid, meaning 15 million fewer people could insured by the program by 2026.” (B)
“The Congressional Budget Office projected that the previous iteration would result in 22 million more uninsured in a decade. “Looking at the revised Senate health bill, it’s hard to see how it could meaningfully alter CBO’s projection of how the uninsured will grow,” the Kaiser Family Foundation’s Larry Levitt noted. “The revised Senate bill reinstates taxes on wealthy people, but it mostly does not spend that money on health care for low-income people.”” (C)
“The home state of a key undecided senator could receive hundreds of millions of dollars under an updated Senate GOP bill to repeal ObamaCare. Lisa Murkowski (R-Alaska) has withheld her support for the Senate’s Better Care Reconciliation Act, citing concerns over Medicaid cuts, Planned Parenthood funding and insurance affordability.
But a new provision could funnel more than $1 billion to her state over the next decade to help reduce the cost of insurance premiums. Under a formula in the revised Senate bill, only Alaska would qualify for additional money from the legislation’s $182 billion stability fund. The legislation would direct the money to states with disproportionately higher premiums. Under the bill, states with premiums that are at least 75 percent of the national average would qualify to keep one percent of the legislation’s long-term insurance stability fund. Alaska is the only state with premiums that high.” (D)
To see a great chart on Who’s In, Who’s Left Out With The Latest Senate Health Care Bill, highlight and click on http://www.npr.org/sections/health-shots/2017/07/13/537037194/whos-in-whos-left-out-with-the-latest-senate-health-care-bill (E)
“At its core, however, the revised version of the Better Care Reconciliation Act ― which McConnell pulled two weeks ago because too few Republican senators planned to vote for it ― remains a vehicle for massive cuts to Medicaid, less financial assistance for people who buy private health insurance, and the return of skimpy junk insurance policies and discrimination against people with pre-existing conditions. Taxes on the rich would remain, but health care companies would enjoy a major tax cut.” (F)
(A) Senate Republicans Unveil New Health Bill but Divisions Remain, by Robert Pear and Thomas Kaplanjuly, https://www.nytimes.com/2017/07/13/us/politics/senate-republican-health-care-bill.html
(B) New GOP health care bill could allow cheaper plans with fewer benefits, by Lauren Fox, Tami Luhby, MJ Lee and Ted Barrett, http://www.cnn.com/2017/07/13/politics/senate-health-care-bill-ted-cruz-amendment/index.html
(C) The new Senate health-care bill may be worse than the old one, https://www.washingtonpost.com/opinions/the-new-senate-health-care-bill-may-be-worse-than-the-old-one/2017/07/13/9aaffc18-680e-11e7-8eb5-cbccc2e7bfbf_story.html
(D) The home state of a key undecided senator could receive hundreds of millions of dollars under an updated Senate GOP bill to repeal ObamaCare, by Nathaniel Weixel, http://thehill.com/author/nathaniel-weixel
(E) Who’s In, Who’s Left Out With The Latest Senate Health Care Bill, by Gisele Grayson, http://www.npr.org/sections/health-shots/2017/07/13/537037194/whos-in-whos-left-out-with-the-latest-senate-health-care-bill
(F) The New Senate Health Care Bill Is Still An Assault On The Safety Net, by Jeffrey Young, http://www.huffingtonpost.com/entry/new-senate-health-care-bill-is-still-an-assault-on-the-safety-net_us_596791a5e4b0a0c6f1e69c3c
“The White House, anxious for a legislative victory on health care, insisted that it fully expects a GOP repeal and replace bill to pass in the coming weeks that will fulfill Trump’s pledge to end Obamacare. Democrats have ruled out negotiating with Republicans unless they work to fix the law, not repeal it.” (A)
“Last week and this week, Republican leaders in the Senate released a series of discussion drafts of the Better Care Reconciliation Act of 2017 (BCRA). BCRA would make major changes to the Medicaid program and to tax credits to purchase private insurance, significantly reducing the number of people who can access affordable coverage, particularly those who are most vulnerable. If a family receives Medicaid, it may no longer qualify in future years as the bill’s cap and cuts force states to reduce Medicaid coverage. If passed, BCRA will be catastrophic to working families across the United States.
BCRA may actually create new inequities and a new set of haves and have-nots in the United States. Millions of people will lose insurance through Medicaid if the bill becomes law, and even more will lose coverage in the private insurance market depending on income levels, insurance coverage, pre-existing conditions or even zip codes.
Under BCRA, coverage depends on where people live and how states choose to implement the law. If a family lives in a state that successfully implements one of the waivers allowed by BCRA, access to comprehensive benefits could be compromised or go away entirely.” (B)
Is the individual health insurance market collapsing because of ObamaCare?
“Early results from 2017 suggest the individual market is stabilizing and insurers in this market are regaining profitability. Insurer financial results show no sign of a market collapse. First quarter premium and claims data from 2017 support the notion that 2017 premium increases were necessary as a one-time market correction to adjust for a sicker-than-expected risk pool. Although individual market enrollees appear on average to be sicker than the market pre-ACA, data on hospitalizations in this market suggest that the risk pool is stable on average and not getting progressively sicker as of early 2017. Some insurers have exited the market in recent years, but others have been successful and expanded their footprints, as would be expected in a competitive marketplace.” (C)
“Sen. Shelley Moore Capito (R-W.Va.), a fierce opponent of the Senate healthcare bill, reportedly said she will kill the legislation if it comes down to her.
“I only see it through the lens of a vulnerable population who needs help, who I care about very deeply,” she said during an interview with Politico that was published Sunday. “So that gives me strength. If I have to be that one person, I will be it.”
Capito, who represents a state that President Trump won by large margins, reportedly expressed concern about the bill’s impact on Medicaid recipients, especially those afflicted by the opioid crisis.
The West Virginia lawmaker also pointed to fears of lost coverage that could occur in her home state, the newspaper reported. (D)
Republican Sen. John McCain said Sunday that he thought his party’s health care bill was on course for failure.
“My view is it’s probably going to be dead,” the Arizona Republican said on CBS’s “Face the Nation.”
Last month, Senate Majority Leader Mitch McConnell unveiled a bill that had been written behind closed doors by a group of Republican senators.
McConnell decided not to call a vote on the measure before the Senate’s break for the
McCain was critical of the process and said the Republicans should “go back to the beginning” and include both parties in the deliberations, letting Democrats have amendments considered to the bill.
“Introduce a bill,” McCain said. “Bring it to the floor. Vote on it. That’s the normal process, and if you shut out the adversary or the opposite party, you’re going to end up the same way Obamacare did when they rammed it through with 60 votes. Only guess what? We don’t have 60 votes.” (E)
“Like Republican lawmakers, some of the groups have found that fixing complex legislation is far more challenging than opposing it. “It’s easier to generate a crowd when you don’t have to be in on the sausage-making,” said Adam Brandon, the president of FreedomWorks.
“The Democrats, their strategy is outrage,” he said. “I get that strategy. I lived that strategy. It’s a unifying strategy to be outraged at the other guy. The hard part is when you get in and have to deliver.”” (F)
(A) President Trump Wants to Pass Health Care Bill by August. But GOP Senators Are Skeptical, by Hope Yen, http://time.com/4851367/donald-trump-gop-senators-health-care-bill-august-deadline/
(B) Health system CEOs: Senate bill will not resolve healthcare challenges, by Anthony R. Tersigni, http://thehill.com/blogs/pundits-blog/healthcare/341146-health-system-ceos-senate-bill-will-not-resolve-healthcare
(C) Individual Insurance Market Performance in Early 2017, Cynthia Cox and Larry Levitt, http://files.kff.org/attachment/Issue-Brief-Individual-Insurance-Market-Performance-in-Early-2017
(D) GOP senator: If I have to be that one person to kill healthcare bill, I will, by Olivia Beavers, http://thehill.com/homenews/senate/341197-wva-republican-if-i-have-to-be-that-one-person-to-kill-healthcare-bill-i-will
(E) McCain: GOP health care bill ‘probably’ will die, by Eli Watkins, http://www.cnn.com/2017/07/09/politics/john-mccain-health-care/index.html
(F) Why Obamacare’s Loudest Critics Aren’t as Loud Anymore, by Kate Zernikejuly, https://www.nytimes.com/2017/07/08/health/why-obamacares-loudest-critics-arent-as-loud-anymore.html?smid=fb-nytpolitics&smtyp=cur
Lessons Learned to inform the next round of TrumpCare.
“If the halting, messy debate over legislation to overhaul health care has taught us anything so far, it’s that when it comes to health care, Republicans don’t know what they want, much less how to get it.
After years of campaigning on the promise of repealing the Affordable Care Act, when it finally came time to act, Republicans put together a plan that looks like a stingier, skimpier version of Obamacare in the individual market, plus a rollback of the law’s Medicaid expansion (delayed until after the next presidential election — long enough that it might not happen).
When asked about the status of the health care bill this week, Senator Pat Toomey, Republican of Pennsylvania, responded, “I didn’t expect Donald Trump to win, I think most of my colleagues didn’t, so we didn’t expect to be in this situation.” In short, Republicans didn’t plan on having to follow through on their promises. (A)
“When Republicans left Washington last week, the Senate’s attempt to overhaul the Affordable Care Act was in grave condition.
Time doesn’t appear to have helped things much.
Consider these two quotes from opposite ends of the Republican spectrum:
1. Maine GOP Sen. Susan Collins: “There was only one issue. That’s unusual. It’s usually a wide range of issues. I heard, over and over again, encouragement for my stand against the current version of the Senate and House health-care bills. People were thanking me, over and over again. ‘Thank you, Susan!’ ‘Stay strong, Susan!’ ” (Washington Post, 7/4)
2. Kentucky GOP Sen. Rand Paul: “The bill is just being lit up like a Christmas tree full of billion-dollar ornaments. And it’s not repeal.” (“Fox News Sunday,” 7/2)
Neither of those quotes sound like there’s much softening from either senator in their opposition to the current version of the health care bill. In fact, both quotes suggest that Paul and Collins are even more convinced that they need to continue to oppose the legislation.” (B)
“Consider, in particular, Republican leaders’ strategy on health care. At this point, everything they say involves either demonstrably dishonest claims about Obamacare or wild misrepresentations of their proposed replacement, which would — surprise — cut taxes for the rich while inflicting harsh punishment on the poor and working class, including millions of Trump supporters…..” (C)
The current health-care debate is often distilled into a series of binary choices for public consumption: good or bad, healthy or sick, help for the rich or help for the poor. As a result, a growing number of Americans are starting to believe that the GOP’s health-care legislation is a cruel ploy to hurt millions of Americans. This is in large part a messaging failure: Good policy must be sold with good arguments, and Republicans have not articulated their own vision of what the American health-care system should look like.” (D)
“As a result, a growing number of Americans are starting to believe that the GOP’s health-care legislation is a cruel ploy to hurt millions of Americans. This is in large part a messaging failure: Good policy must be sold with good arguments, and Republicans have not articulated their own vision of what the American health-care system should look like. A conservative approach to health policy would ideally create a thriving market system, with a sufficient number of insurers to compete for consumer business leading to low prices and quality coverage. A targeted safety net would protect the truly vulnerable, and tax credits would be provided on a sliding scale to those who need help purchasing private coverage.” (E)
“At its core, offering greater “choice” in health plans means eliminating both standardization and basic quality minimums.
Eliminating standardization — for example, Obamacare’s rules for what benefits are covered, coverage tiers and out-of-pocket maximums — would make it much harder for consumers to comparison-shop.
Shopping for health insurance is already super-complicated and time-consuming, and lots of people make objectively bad choices. You have to comb through fine print and in-network doctor lists. You have to sort out which deductibles and premiums match your family’s likely needs and risk tolerance. Imagine how much more complicated this would become if insurers could offer many more plan configurations with more hidden exceptions and fewer quality controls.” (F)
“On Thursday, Mr. McConnell again suggested that Republicans might find themselves in negotiations with Democrats on a modest plan to shore up the existing health insurance exchanges if they cannot advance their own legislation. “ (G)
(A) Time for Republicans to Start From Scratch on Health Care, by Peter Suderman, https://www.nytimes.com/2017/07/07/opinion/republicans-health-care-new-start.html?smprod=nytcore-ipad&smid=nytcore-ipad-share
(B) Why the Senate health care bill is in trouble, in 2 quotes, by Chris Cillizza, http://www.cnn.com/2017/07/05/politics/health-care-susan-collins-rand-paul/index.html
(C) Attack of the Republican Decepticons, by Paul Krugman, https://www.nytimes.com/2017/07/07/opinion/republican-healthcare-obamacare.html
(D) The GOP’s Health-Care Messaging Needs Serious Work, https://www.yahoo.com/news/m/5e007bfa-e254-3397-aa23-cdcea0cc603a/ss_the-gop%E2%80%99s-health-care.html
(E) The GOP’s Health-Care Messaging Needs Serious Work by Juliana Darrow, http://www.nationalreview.com/article/449279/gop-health-care-reform-messaging-problem
(F) The reason Republican health-care plans are doomed to fail, by Catherine Rampell, https://www.washingtonpost.com/opinions/the-reason-republican-health-care-plans-are-doomed-to-fail/2017/07/06/4bb40f92-6286-11e7-a4f7-af34fc1d9d39_story.html?utm_term=.c4fa12366e6d
(G) Mitch McConnell, Master Tactician, Faces Daunting Challenge: A Health Bill, by CARL HULSE, https://www.nytimes.com/2017/07/07/us/politics/mitch-mcconnell-senate-health-care-bill.html?smprod=nytcore-ipad&smid=nytcore-ipad-share
“The proposal would allow insurance companies the freedom to sell any kinds of health plans they want as long as they also sell at least one plan that qualifies under the regulatory requirements of the Affordable Care Act (ACA)….”
““It sounds like a recipe for segmenting the market in a way that would destabilize it. You would end up back in the scary dysfunctional world we were in before the ACA where healthy people could get coverage although that coverage might not protect them if they got sick and sick people would have to pay an unaffordable amount for coverage,” …..“The coverage that sick people need would still have to be offered but offered at any price, so probably unaffordable,” …. (A)
Here’s why the problem exists. Imagine that two plans are available from an insurer, one in which you get charged the same rate regardless of your medical risks and one in which your rates depend on your medical risks. It does not take a genius to forecast the results: people who believe themselves high risk will flock to the plan that does not base rates on medical risks (the “community rated plan”) while people who believe themselves to be low risk will go for the plan in which healthier people pay lower rates. This tendency will be even stronger if the latter plan also offers lesser benefits. But … the insurer, realizing that this separation will occur, will set the premiums in the community rated plan quite high, precisely because it knows the applicant pool is going to come disproportionately from the sick… In the end, then, the community rated pools are likely to have very high gross premiums, perhaps akin to a high risk pool. (B)
“Under Cruz’s model, many healthy consumers would avoid shelling out for high-cost, comprehensive plans. This would then make the pool of people willing to pay for such coverage disproportionately sick, which would cause the price of such plans to rise, which would make the pool even sicker, which cause prices to premiums to rise further, which would make the pool sicker still, on and on, in a death spiral, until the sick were priced out of the market completely.” …..
Conservatives are being honest about one thing: A full repeal of Obamacare would send the health-care system back to the pre-ACA status quo ante. In those days people with preexisting conditions were mostly out of luck (aside from whatever succor they are offered via the health-insurance ghettos states create under the rubric of “high-risk pools”), while healthy people had a wide range of affordable options — including the option of going without insurance…..” (C)
(A) GOP tensions rise over Cruz proposal, byAlexander Bolton, http://thehill.com/policy/healthcare/340765-gop-tensions-rise-over-cruz-proposal
(B) Senator Cruz’s Healthcare Reform Proposal Creates A Monster “Income Cliff”, by Seth Chandler, https://www.forbes.com/sites/theapothecary/2017/07/03/senator-cruzs-healthcare-reform-proposal-creates-a-monster-income-cliff/#5dc929484615
(C) Cruz Amendment to Senate Health-Care Bill Now Dividing GOP, by Ed Kilgore, http://nymag.com/daily/intelligencer/2017/07/cruz-amendment-to-senate-health-care-bill-now-dividing-gop.html