The latest Senate health proposal reins in costs by effectively splitting the individual insurance market, with healthy people diverted into stripped-down plans and chronically ill individuals left with pricey and potentially out-of-reach options, insurance analysts said.
This draft — a fresh attempt by the Republican Party to undo the Affordable Care Act — injects more uncertainty into plans for people with preexisting conditions such as cancer, asthma, diabetes or other long-term ailments. Those people, insured through ACA marketplaces now, could be more isolated than in an earlier version of the Senate bill.
For such patients, “I would be pretty nervous,” said Sabrina Corlette, a research professor at Georgetown University’s Health Policy Institute. “You will have separate pools — one that only healthy people can get into and one for you. That pool is liable to get increasingly expensive — in fact, very expensive over time.”
The two biggest insurer trade groups went further on Friday, saying in an unusually strong-worded letter that “millions of more individuals will become uninsured” if the proposal becomes law.
Plans sold to individuals and families through the Obamacare exchanges cover some 10 million people, many with chronic disease.
A draft bill released Thursday added a proposal from Texas Sen. Ted Cruz that would let insurers sell health coverage outside the ACA exchanges with no provisions for prescription drugs, mental illness, hospitalization or almost any other benefit.
Such plans would be far cheaper than comprehensive coverage and almost certainly draw younger, healthier people away from high-benefit insurance, analysts said.
Without healthy customers subsidizing the sick, premiums and other costs would soar for plans that accept chronically ill patients, experts said. The Senate draft includes $70 billion over a decade to help pay those costs, but it’s far from clear that would be enough.
Insurers were struggling last week to grasp the implications of the legislation, studded with ambiguous language. One big takeaway: The Senate’s version of health care would undermine historical assumptions and drastically shift risk in the individual market.
Letting carriers sell low-cost, low-benefit plans to healthy consumers “is simply unworkable in any form and would undermine protections for those with pre-existing medical conditions, increase premiums and lead to widespread terminations of coverage for people currently enrolled in the individual market,” America’s Health Insurance Plans and the Blue Cross Blue Shield Association, two lobbying groups, said in a Friday letter to the Senate.
The Republicans are nowhere near success with this plan. Already two of the 52 Republican senators — Kentucky conservative Rand Paul and Maine moderate Susan Collins — have said they won’t support the bill. One more defection would sink it, and a delay caused by the surgery of Arizona Republican John McCain gives opponents more time to build resistance.
Senate leaders had scheduled a vote for this week but postponed it to give McCain time to recover from treatment of a blood clot near his eye.
Meanwhile, the nonpartisan Congressional Budget Office is likely to issue its assessment of the bill this week. The CBO had said an earlier Senate bill would increase the number of people without health insurance by 22 million by 2026.
The Republican plan offers a freer insurance market — something the party has long favored — while purporting to protect those with existing illness. Insurers selling stripped-down plans would be required to also offer traditional Obamacare plans covering preexisting conditions.
But such coverage risks becoming a high-cost ghetto for the chronically ill, experts said. It would likely become unattractive to carriers and unaffordable to members who could face paying thousands of dollars for premiums and thousands more out-of-pocket before coverage kicks in.
Even though insurers selling unregulated plans would be required to offer full-coverage plans to all comers, they could limit their risk with time-tested maneuvers to repel the sick, said Ana Gupte, who follows health care stocks for Leerink Partners.
“They usually find ways to minimize enrollment” such as jacking up premiums or cutting broker commissions for certain coverage, she said.
Nor would there likely be much choice in high-benefit Obamacare plans, she said. Under the Senate bill, carriers seeking to sell skimpy coverage would have to offer only one high-benefit “gold” plan and a medium-benefit “silver” plan as traditionally sold under the Affordable Care Act.
Even then, the legislation would allow state officials to alter Obamacare standards for out-of-pocket maximums and essential health benefits.
That even could allow richer plans intended for the chronically ill to drop coverage of prescription drugs, mental illness, maternity care or other items.
The bill includes two measures intended to keep costs in high-benefit Obamacare plans from spiking out of control. One is the $70 billion in federal subsidies to help cover the expense of the pool of sick people.
“It seems to me it’s not nearly enough” to keep plans affordable for those with chronic illness, said Timothy Jost, emeritus law professor at Washington and Lee University and an expert on health reform.
The other is a six-month waiting period for applicants wanting to buy full coverage who don’t already have it.
That’s supposed to induce healthy people to buy high-coverage plans and help subsidize the sick. Otherwise they risk a coverage gap if they become gravely ill or hurt, raising the chance they would have to pay thousands out-of-pocket for any unexpected medical expense.
But that incentive to buy comprehensive coverage is far weaker than Obamacare’s mandate, which fined people for not having insurance, Jost said. The Republicans’ bills would scrap the mandate.
“I just don’t think it’s going to be terribly effective,” he said.
–Jay Hancock, Kaiser Health News
Capt says
More worthless news from the Out of Touch Republican congressional members. Do not penalize the people that are ill and rape the people of their paycheck just for healthcare and stop making the middle class pay for everything while giving unreal tax breaks to the wealthy. Make the wealthy pay for this, they can afford it.
tulip says
People who are high risk drivers pay more for auto insurance, people who are high risk or have preexisting conditions, should also pay more for health insurance.
If the affordable health care plan pays immediately for pre existing condtions, then what’s to prevent someone who has private insurance who has a 2 year wait before quailifying for pre existing illness, from dropping their insurance and signing up for Affordable Health in order to get instant insurance payments.?
Ws says
I think Trump should let Obamacare fail all on its own. Let all the people who are not in the real world see that Obamacare is failing on its own. Trump shouldn’t bother trying to fix the healthcare when all the crybabbies have nothing good to say. Please Donald Trump just let all the crybabbies have their way jist let it be and fail and then watch the crybabbies cry all over again like they had no idea that would happen. Gee wiz people get a grip on reality please.
Ken Dodge says
“Plans sold to individuals and families through the Obamacare exchanges cover some 10 million people, many with chronic disease.” Seems to me that any plan that covers a pre-existing condition for folks that already have that pre-existing condition is not insurance, as the ‘risk’ is already 100%. Don’t know what to call it, but it sure isn’t ‘insurance’ in the classic sense of the word.
John dolan says
This piece of crap bill provides a taxpayer bailout of health insurance companys.Since they only made forty Billion last year in profits, God help us. Stop the madness and eliminate the problem.
RickG says
Has anyone noticed the irony… delay of the vote on a health care bill that will remove 22 million people from health insurance because Sen McCain is having surgery paid for by the American taxpayer. I guess single payer is good for some just not for all.
Knightwatch says
Yeaaa… we can cut taxes for the super wealthy. We can restore America to 1950, or maybe 1850. We can sleep at night secure in the knowledge that all it took was a few deaths (maybe more – who cares) of the elderly and the working poor. So we have thousands of diabetics, cancer victims and other people with pre-existing conditions on the streets without health insurance. It’s their own fault.They could have gotten better jobs. They could have taken better care of themselves. They could have died at birth!. But who cares anyway. They can just line in the emergency room just like all the other “takers”
Trump’s America… “live and let die”. Just don’t cost me anything. It’s good to be a conservative Republican. Don’t have to think anymore…or question, or feel remorse or regret.
Pogo says
@FL Readers and Republicans too
Only health insurance company certified people are used to make Trumpoylent Green.
Tastes great!
– V Putin
The rest of us will join the circle of life.
Thank you Jesus.
Peace
Pierre Tristam says
tulip, you’re making an appealing but untenable analogy, even if we don’t agree that both driving and health care are rights, not privileges (yes, even driving: even a Florida judge agrees, but anyway). Let’s assume for the sake of argument that both are privileges. That doesn’t take away the fact that in the overwhelming number of driving crashes, there is blame: careless drivers crash more. Every actuarial table shows it. But neither you nor I choose when we may be struck with cancer, heart disease, some illness neither of us has ever heard of, or some contagion we did everything to avoid but could not. Neither one of us should be punished for, say, giving a kidney to someone who needs it, as a friend in the community has done and been punished for, neither one of us should pay more because we’ve inherited genes we had nothing to do with–from god or parents or monkeys, it all amounts to the same injustice. So to treat a preexisting condition as, essentially, a yellow star is no less bigoted, in the end, than to treat someone less justly because he’s Jewish, or liberal. As to your second point: it’s no different than applying the rules of the market. You want people to have the freedom shop for their health care (an absurd proposition, but that too is for another day: I’ll stipulate for argument’s sake). In that case why would you prevent anyone from making whatever choices they have in the landscape? Finally, and here I know I’m being unfair but not really: you’re almost certainly on Medicare. Supplemental insurance aside of course, do your premiums fluctuate depending on your pre-existing conditions? Of course not, though god knows old age is the pre-existing condition from hell. So why would you impose a stricter, less humane standards on younger people?
Joe Kenda says
why not offer medicare to all americans that want health coverage?
Yellowstone says
The reality is folks your healthcare is a commodity that is bought and sold throughout the insurance industry. Unlike the with ACA, to sustain a free enterprise industry there have to be profits and shareholders who expect their share of those profits. In a business there also losses.
Frankly, the insurance folks look at those who are sick and say, “we wish you were dead”.
Let’s make America great again – my foot!.
Pogo says
@FL Readers and Republicans too
A history of why the US is the only rich country without universal health care
https://qz.com/1022831/why-doesnt-the-united-states-have-universal-health-care/
Wake-up.
HEALTHCARE-NOW!
https://www.healthcare-now.org/
SINGLE PAYER NOW
http://www.singlepayernow.net/
Physicians for a National Health Program
http://www.pnhp.org/
Make America Good Again
Sherry says
@Joe Kenda. . . a great idea. . . and one that President Obama and the Democrats wanted to begin with. A “single payer” system that is mandatory and covers everyone. The premiums would go down because “everyone” would be enrolled and there would be NO FOR PROFIT middlemen called private insurance companies. We would ALL benefit greatly. That is except the insurance companies and their lobbyists. . . and Congress . . .who just loves those “campaign contributions” (AKA Bribes)!
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