The latest version of the last-ditch Senate Obamacare repeal bill is — not surprisingly — a mess, and one of the areas bringing the most confusion and inconsistency is what the legislation has to say about protecting those with pre-existing conditions.
As Michigan Law Professor Nicholas Bagley pointed out, those provisions appear to be sloppily drafted, and in some places, contradictory of one another. But according to Bagley and other health care experts, the ambiguity probably does not matter at the end of day if you look at another, particularly wonky provision: one allowing for states to permit insurers to operate separate risk pools.
The Graham-Cassidy proposal — co-sponsored by Sens. Lindsey Graham (R-SC) and Bill Cassidy (R-LA) — gives states the green light to rewrite the Affordable Care Act’s current requirements that insurers operate a single risk pool. The provision appears in a line towards the very end of the bill, in a section about which ACA mandates are on the table for states to rework as they apply for the block grants that replace Obamacare’s current system of insurance tax subsidies and expanded Medicaid funding.
States, in their application for the block grants, must describe the “number of risk pools into which a health insurance issuer of such coverage may group individuals enrolled in such coverage.”
What this means, according to Timothy Jost, a health care law specialist at Washington and Lee, when coupled with the other provisions in Graham-Cassidy, is that states would be allowed “to permit insurers to create very-high-deductible plans that would cover very limited services, and to put them in a separate risk pool from more extensive coverage, dramatically increasing premiums for people with preexisting conditions. ”
Kaiser Family Foundation vice president Larry Levitt also saw the bill’s segmented risk pools as leaving sick people vulnerable, when working in concert with the other Obamacare insurer regulations that could be ignored by states
Risks for pre-existing conditions in new Graham-Cassidy: skinny benefits, no out-of-pocket cap, segregated risk pools, health status rating.
— Larry Levitt (@larry_levitt) September 25, 2017
Segmenting the individual health care market has been a focal point in the health care debates between GOP conservatives and more rank-and-file Republicans, including in past iterations of the Senate repeal effort and even all the way back to the House negotiations.
In action it means that healthy, less costly people will be funneled into their own risk pool, likely resulting in lower premiums for them. Those with preexisting conditions will be left in the risk pools for consumers who need more comprehensive plans. Their premiums will spike as the healthy people flee that pool, possibly to the point that sick people might not be able to afford the increasing premiums altogether.
The closest thing the latest Senate bill has in offering a guardrail to prevent the situation is the requirement that states explain to the federal government how their health care plans “shall maintain access to adequate and affordable health insurance coverage for individuals with pre-existing conditions.” There’s no further definitions or guidance as to what “adequate and affordable” access means.
Fights over whether to segment risk pools have tanked Obamacare repeal bills in the past.
Back in July, Sen. Mike Lee (R-UT) helped kill, for the first time, the repeal legislation that had been largely written by Senate leadership staff, in part because it kept the Affordable Care Act’s single risk pool and community ratings provisions, which prevent insurers from charging consumers more on the basis of their health care status.
Sen. Ted Cruz (R-TX) sought to craft a “compromise” that would have waived community ratings and other regulations but would have maintained a single risk pool for unregulated and Obamacare-compliant plans. That idea left health care experts and insurers flummoxed over whether such a scenario is even workable. Regardless, a version of the McConnell bill with the Cruz provision fell well short of the votes needed to pass this summer.
The Graham-Cassidy bill splits the baby the other way: It technically keeps community ratings, but allows segmented risk pools, which would render pre-existing conditions protections moot in practice. For now, it also appears to be short of enough votes to pass.
