House Republicans still don’t have a deal to revive their health care bill, but the White House is laying the groundwork for negotiations to move quickly, meeting individually Monday with moderates and conservatives to discuss a possible agreement.
That agreement, which is still far from a reality, would hinge on Republicans accepting changes to their health care bill that would violate a key promise from President Donald Trump, namely that insurers would have to offer plans to people with pre-existing conditions.
While those regulations would still technically exist, the idea is that the House bill would now allow states to opt out of “community rating” regulations, which compel insurers to offer plans at the same rate for sick people. Ditching those protections would let insurers charge exorbitant rates for people with pre-existing conditions while also offering plans that don’t offer key services, like maternity care, hospitalization or lab services. Conservatives believe those people would then go into so-called high-risk pools for coverage, but the effect would still likely lead to people who need health care the most paying the most ― or not being able to afford coverage at all. (Article)
Again, the “solid idea” is allowing states to waive a number of provisions of the Affordable Care Act as well as the so-called essential health benefits, a set of 10 basic services that insurers are mandated to provide.
Meadows said Monday night that the pre-existing conditions protections would remain in the new form of the health care bill, but when pressed on whether gutting the community rating provisions would allow insurers to charge people with pre-existing conditions more, he acknowledged that some sick people may be picking up the slack so that premiums of the healthy would go down.
“The fundamental idea is that marginally sick people would pay the risk associated with their coverage,” Meadows said. “Those that have premiums that would be driven up because of catastrophic illness or long-term illness, we’ve been dealing with that for a long time with high-risk pools.”
Conservatives are open to the idea of sending more money to the high-risk pools so they could serve as a “backstop” for people who couldn’t get decent coverage because of pre-existing conditions. But a majority of states ran high-risk pools before the Affordable Care Act, and the pools were notorious for high premiums and deductibles, along with annual or lifetime limits on coverage. In other words, the pools lacked the kind of coverage and protections that people with medical problems need ― and they frequently wouldn’t cover pre-existing conditions for six to 12 months.
Those misgivings notwithstanding, adding more money to the high-risk pools is a priority for moderates, and the tentative deal would further outline how $115 billion in funding that was already added to the bill would go to those pools.
But it’s an open question whether the votes would be there for this yet-to-be-written version of the bill. Republicans have no timeline on a vote, though the White House seems to prefer passing the bill as soon as possible, potentially even this week so that Republicans don’t have a chance to go home for a scheduled recess next week and be dissuaded by constituents.
Critics say even some of the most successful high-risk pools that operated before the advent of Obamacare were very expensive for patients enrolled in the plans, and for the people who subsidized them — which included state taxpayers and people with employer-based health insurance.
The argument in favor of high-risk pools goes like this: Separate the healthy people, who don’t cost very much to insure, from people who have pre-existing medical conditions, such as a past serious illness or a chronic condition. Under GOP proposals, this second group, which insurers fear might be expected to use more medical care, would be encouraged to buy health insurance through high-risk insurance pools that are subsidized by states and the federal government.
Republican Speaker of the House Paul Ryan made the case for high-risk pools on public television’s Charlie Rose show in January.
“By having taxpayers, I think, step up and focus on, through risk pools, subsidizing care for people with catastrophic illnesses, those losses don’t have to be covered by everybody else [buying insurance], and we stabilize their plans,” Ryan told the TV host.
Minnesota’s newest congressman Jason Lewis (R-Minnesota) recently endorsed high-risk pools on CNN.
“Minnesota had one of the best … high-risk insurance pools in the country,” Lewis said. “And it was undone by the ACA.”
It’s true that the Affordable Care Act banned states’ use of high-risk pools, including the Minnesota Comprehensive Health Association, or MCHA. But that’s because the MCHA was no longer needed, the association’s website explains; the federal health law requires insurers to sell health plans to everybody, regardless of their health status.
Supporters of the MCHA approach tout a return to it as a smart way to bring down the cost of monthly premiums. But MCHA had detractors, too.
Craig Britton of Plymouth, Minn., once had a plan through the state’s high-risk pool. It cost him $18,000 a year in premiums.
Britton was forced to buy the expensive MCHA coverage because of a pancreatitis diagnosis. He calls the idea that high-risk pools are good for consumers “a lot of baloney.”
“That is catastrophic cost,” Britton says. “You have to have a good living just to pay for insurance.”
And that’s the problem with high-risk pools, says Stefan Gildemeister, an economist with Minnesota’s health department.
“It’s not cheap coverage to the individual, and it’s not cheap coverage to the system,” Gildemeister says.
MCHA’s monthly premiums cost policy holders 25 percent more than conventional coverage, Gildemeister points out, and that left many people uninsured in Minnesota.
“There were people out there who had a chronic disease or had a pre-existing condition who couldn’t get a policy,” Gildemeister says.
And for the MCHA, even the higher premiums fell far short of covering the full cost of care for the roughly 25,000 people who were insured by the program. It needed more than $173 million in subsidies in its final year of normal operation.
That money came from fees collected from private insurance plans –- which essentially shifted a big chunk of the cost of insuring people in MCHA program to people who get their health insurance through work.
Gildemeister ran the numbers on what a return to MCHA would cost. Annual high-risk pool coverage for a 40-year-old would cost more than $15,000, he says. The policy holder would pay about $6,000 of that, and subsidies would cover the more than $9,000 remaining.
University of Minnesota health policy professor Lynn Blewett says there is a better alternative than a return to high-risk pools. It’s called “reinsurance.” In that approach, insurers pay into a pool that the federal government administers, using the funds to compensate health plans that incur unexpectedly high medical costs. It’s basically an insurance program for insurers.
The big question is whether lawmakers will balk at the cost of keeping premiums down for consumers — whatever the approach, Blewett says.
“The rub is, where that funding is going to come from?” she says. “And is the federal government or the state government willing to put up the funding needed to make some of these fixes?”
The national plan Ryan proposes would subsidize high-risk pools with $25 billion of federal money over 10 years. The nonpartisan Commonwealth Fund estimates the approach could cost U.S. taxpayers much more than that — almost $178 billion a year.
Researchers at the consulting firm McKinsey & Company say reinsurance would likely cost about a third of what the high-risk pool option would.
Just a reminder- this plan is not to create a good comprehensive health insurance, it is to create tax breaks for the very wealthy and to start killing Medicaid.
As the American Health Care Act stands right now, it is mostly a large tax cut for the wealthy paid for with Medicaid cuts. That achieves two specific and real Republican goals. It does not, however, reform individual market health care policy in a way that would drive down costs and premiums for individuals, the ostensible and stated goal of health care reform. It gets halfway there, and then gives up.House Republican leaders are blaming Senate rules for that. They have begun emphasizing that the AHCA is only the first of three steps in reforming health care. Under the Byrd Rule, the provisions in reconciliation bills—which the Senate can pass without a 60-vote filibuster—must directly affect the budget. Items in the AHCA like cutting taxes, wiping out the individual mandate tax penalty, or cutting Medicaid would directly affect the budget. Republicans can pass those on a party-line vote with their slim Senate majority, assuming they ever resolve their own internal disputes.
Here is the problem- even this bill won’t pass the Byrd Rule (the most confusing parts of the new bill)
There are currently three specific items in the AHCA that don’t seem compatible with Senate reconciliation rules. The continuous coverage provision assesses a premium surcharge for those who enroll in plans after long lapses without insurance. This is not a tax like the individual mandate, the item it’s intended to replace. The surcharge is a penalty paid to the insurer. So, that’s a market regulation. The bill also eliminates the bronze, silver, gold, and platinum actuarial value tiers for health insurance plans offered on the exchanges. That is a market deregulation. Finally, the bill loosens the Affordable Care Act’s “age bands,” allowing insurers to sell older people plans at five times the cost it would sell to younger people rather than the three times that the ACA allows. That is a market deregulation.