Once again, questions about the Affordable Care Act were the biggest news of the week. The GOP introduced an amendment to the “American Healthcare Act” (aka “Trumpcare”) designed to gain support from far-right conservatives and finally get the votes necessary to uphold Trump’s campaign pledge to repeal and replace Obamacare.
With the administration desperate to move on to tax reform, is this the last stand for Trumpcare? Join me as I recap what went down and where we’re heading.
Trumpcare_v2: What’s new?
Quick reminder: the first version of this bill was introduced by Representative Paul Ryan (R-WI) back in February. At the last minute, Ryan pulled it from being voted on because it didn’t appear the GOP would have the votes for it to pass.
What’s now being proposed is the same bill, but with an amendment brought forth by Tom MacArthur (R-NJ). The amendment appears to have the Freedom Caucus in mind, a group of 36 Republican congressional representatives that opposed the original bill believing it wasn’t enough of a departure from the existing Affordable Care Act.
So, what changes are in this amendment? Well, the first is to remove the concept of a Community Rating for insurers as well as allow States to opt-out of the Essential Health Benefits mandate. These are the two most important concepts to understand and the reason the bill might get passed.
Community Rating is a concept introduced as part of the Affordable Care Act in an effort to distribute the cost of healthcare more evenly across healthy and sick people. In the past, insurers would individually rate anyone purchasing insurance. This meant asking them a number of questions and assigning an insurance rate based on how much coverage for this individual was likely to cost. (Think of car insurance—your rate varies depending on whether you have a clean record or if you’ve been in any accidents.) Obamacare removed this practice and forced insurers to come up with a single rate to charge all enrollees in a community. This had the effect of raising the cost of insurance for healthy people and lowering it for the sick.
As part of MacArthur’s amendment, insurers would not be able to retroactively adjust rates for enrollees, but would be able to administer this individual rate any time a new enrollee purchased coverage, removing the concept of a single rate for a community and leading to varied rates for individuals based on their pre-existing health status.
Essential Health Benefits is a concept that was born out of the ACA that mandates the minimum coverage insurers must provide, and includes 10 categories:
- Ambulatory patient services
- Emergency services
- Hospitalization
- Maternity and newborn care
- Mental health and substance use disorder services including behavioral health treatment
- Prescription drugs
- Rehabilitative and habilitative services and devices
- Laboratory services
- Preventive and wellness services and chronic disease management
- Pediatric services, including oral and vision care
The MacArthur amendment allows States to opt-out of adhering to these requirements. Opting-out would give insurers a great deal more flexibility to offer cheaper plans, but would also drastically limit coverage to people who can’t afford premium plans.
What was the MacArthur scandal?
Good question—this was really bizarre and warrants discussion. When MacArthur first brought his amendment to the floor, there was language that exempted members of Congress and their families from being affected by this new ability for States to waive things like essential health benefits. Sarah Kliff at Vox broke the story and then, in a comical back-and-forth, saw MacArthur saying it wasn’t him who included that language. Instead, he alledged that it was inserted by the Senate Budget Committee… only to have the Budget Committee staunchly deny those claims in a comical showing of “I didn’t do it, you did it” finger pointing.
After the story was made public (and due to the obvious backlash), MacArthur promised to adjust the amendment’s language to no longer provide this type of protection to Congressional employees.
Whew. Good thing someone reads the fine print on these things, eh?
What was the response to the proposed legislation?
Instead of sharing my opinion, I’ve collected a number of responses from organizations and individuals in the industry.
The MacArthur Amendment would allow states to apply for waivers from critical consumer protections provided in the Affordable Care Act (ACA), including the age rating ratio of 3 to 1, the requirements that health insurers must cover certain essential health benefits, and the ban on health status underwriting. The current ban on health status underwriting protects individuals from being discriminated against by virtue of their medical conditions. Prior to the passage of the ACA, such individuals were routinely denied coverage and/or priced out of affordable coverage. We are particularly concerned about allowing states to waive this requirement because it will likely lead to patients losing their coverage. Although the MacArthur Amendment states that the ban on preexisting conditions remains intact, this assurance may be illusory as health status underwriting could effectively make coverage completely unaffordable to people with preexisting conditions. There is also no certainty that the requirement for states to have some kind of reinsurance or high-risk pool mechanism to help such individuals will be sufficient to provide for affordable health insurance or prevent discrimination against individuals with certain high-cost medical conditions.”
This harmful legislation still puts an Age Tax on older Americans and puts vulnerable populations at risk through a series of backdoor deals that attempts to shift responsibility to states. Older Americans need affordable health care services and prescriptions. This legislation still goes in the opposite direction, increasing insurance premiums for older Americans and not doing anything to lower drug costs.”
Nancy A. LeaMond, Executive Vice President and Chief Advocacy and Engagement Officer, AARP
The recent amendments to the bill, intended to make it more palatable to those who did not support it initially, are even more disastrous for people who have just gotten health care. Changing the current rules to undermine essential benefits requirements and protections for people with preexisting conditions, as well as allowing insurers to set annual and lifetime caps on the care they cover, would seriously undermine health security and leave many individuals with substandard protection. Even the proposed state high-risk pools would be an inadequate and underfunded solution to a problem that need not exist in the first place.”
Sister Carol Keehna, President and CEO, Catholic Health Association of the United States
This amendment would create a perverse incentive for states to race to the bottom in an effort to lower their costs and premiums for the healthy while leaving the most economically and medically vulnerable behind.”
It’s easy to offer inexpensive health coverage if it doesn’t cover the benefits people need. The MacArthur amendment will offer states and health plans numerous opportunities to charge people with pre-existing conditions higher rates, design plans that explicitly exclude the services they are most likely to need, and erect barriers to care. For pregnant women, this likely means fewer plans that cover maternity and newborn care, and much higher rates for those that do.”
In short, the proposal could lead to bare bones coverage plans that push significant costs onto patients who access care. Reducing the front-end premium cost of a plan by eliminating covered benefits increases the financial burden to patients who face significant out-of-pocket costs for uncovered, but medically-necessary services to treat life-threatening diseases like cancer.”
Christopher W. Hansen, President, American Cancer Society Cancer Action Network
