President Donald Trump told Bloomberg News on Monday that the healthcare bill he wants Congress to pass is “not in its final form right now.
“It will be every bit as good on pre-existing conditions as Obamacare,” he said.
But currently, the bill isn’t as good on preexisting conditions as Obamacare — because of changes Trump’s own White House sought to the bill. To secure the votes of members of the far-right House Freedom Caucus, the White House brokered an amendment that would allow states to waive Obamacare rules that protect people with preexisting conditions.
Republican trepidation about undermining these protections is a major reason there are not the votes to pass the bill in the House. For example, Rep. Billy Long of Missouri — not a moderate by any measure — told The Hill he can’t vote for the latest version of the American Health Care Act because it “strips away any guarantee that preexisting conditions would be covered and affordable.”
But some Republicans are claiming that the Republican bill is good enough on preexisting conditions, already meeting Trump’s promise to be “every bit as good” as Obamacare on this measure.
“The Republican plan protects people with pre-existing conditions,” a spokesperson for Speaker Paul Ryan told NBC News. “States can’t opt out without a high risk pool to take care of them. And waivers never apply to anyone who has been continuously covered. We believe there is more than one way to address this problem.”
This argument is similar to the one Ramesh Ponnuru has made in National Review. The idea is, while the Republican bill would allow insurers to charge sick people more for insurance, it would still protect people because insurers wouldn’t be able to raise prices on you due to your health as long as you never let your coverage lapse. And if you did let your coverage lapse, you’d be able to go buy a plan through a high-risk pool.
This argument is highly misleading, for two reasons.
The first is that coverage gaps are common. Often, people lose health insurance coverage because they lose a job. Many people cannot afford to buy their own health insurance when they have lost the income from their job.
Ponnuru argues that the insurance subsidies in the AHCA would help people avoid coverage gaps. In some cases, they would. But the subsidies (of $US2,000 to $US4,000 per person) would not be sufficient to buy a comprehensive insurance policy. Many people would still find it unaffordable to maintain coverage when they face a financial shock — especially if they are older or live in high-cost markets.
A possible exception would be if the abolition of Obamacare’s “essential health benefits” rules allows insurers to design limited insurance policies that are scoped to be priced equal to the credit amounts — for example, you might be able to get a health plan for $US2,000, just using your tax credit and making no payment out of pocket, but the plan wouldn’t cover doctor’s visits or hospitalisation.
In this scenario, people would find it easy to maintain some form of continuous coverage, but health insurance markets would become highly dysfunctional on other dimensions, as I wrote in March. (Also, people would have health insurance that doesn’t cover important benefits, such as doctor’s visits.)
If everything else fails, Ponnuru and Ryan’s spokesperson both argue that uninsured sick people could fall back on a high-risk pool. And indeed, under the Republican healthcare law, states waiving the preexisting condition protections would have to provide some form of subsidized risk-pool or reinsurance program to help insurers cover high-cost patients.
But the law would impose no adequacy test on these programs.
Before Obamacare, many states offered high-risk pools, which were intended to provide subsidized insurance to high-cost patients who insurers would otherwise be unwilling to cover at an affordable price. The problem was, covering these patients is very expensive, and public funding to subsidise the pools routinely proved to be insufficient to cover the number of people who needed such coverage.
As a result, pools often featured very high pricing (unaffordable to many would-be participants) and waiting lists to participate. The Republican plan would likely lead to the return of this dysfunction.
Protecting people with preexisting conditions, to ensure they can buy affordable insurance, is one of the most popular parts of Obamacare. The current Republican proposal does not maintain such protections, despite what its supporters claim.
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