Health care legislation is back on the table now that Congress has returned from its spring vacation. The White House is pushing hard to get something through Congress as early as this week. Although no bill has yet been introduced, the White House and congressional Republicans appear to have settled on the contours of a new legislative proposal.
Late last week, Politico published an outline of the latest GOP health care proposal, known as the “MacArthur Amendment.” A bill based on the MacArthur Amendment would nominally keep in place two key features of Obamacare, the prohibition against insurers denying coverage to people with pre-existing medical conditions, and the “community rating” provision that prohibits insurers from charging higher premiums to people with pre-existing conditions.
But don’t be fooled. While the proposed legislation may appear to keep these key provisions of Obamacare alive, it’s an illusion. It is really designed to quietly kill them.
It might not flip the switch that executes the pre-existing condition provision, but it leads the condemned to the electric chair, straps it in, and hands over the switch to the states.
While the proposed legislation may appear to keep these key provisions of Obamacare alive, it’s an illusion.
Why all the smoke and mirrors?
Because it is designed to create the false impression that Donald Trump is keeping his promise to retain the provision of Obamacare that prohibits insurers from denying coverage to people with pre-existing conditions, while it is actually helping him break it.
During the campaign, Trump vowed that although he would “absolutely get rid of Obamacare,” he would retain the pre-existing condition provision: “I want to keep pre-existing conditions. I think we need it. I think it’s a modern age, and I think we have to have it.”
A proposed bill following the outline of the MacArthur Amendment would provide Trump with cover to claim that he has kept his promise because that provision will nominally stay on the books. Under the surface, however, it provides an easy mechanism for the states to effectively neuter it by obtaining so-called “Limited Waivers” from the Secretary of Health and Human Services, Tom Price.
The Limited Waivers would allow states to opt out of two key requirements of Obamacare, the so-called “community rating” rules and the 10 Essential Health Benefits (”EHB”) that policies are required to cover.
While “community rating” may sound innocuous, it is in fact the mechanism that enables people with pre-existing conditions to obtain affordable coverage. The Community Rating rules require that insurers charge the same price to everybody of the same age, regardless of whether they have pre-existing conditions. If insurers are required to insure people with pre-existing conditions, but left free to charge those people higher prices, insurance would become out of reach for many people who suffer from pre-existing conditions. The Obamacare Community Rating provision solved that problem by prohibiting insurers from charging higher prices to sick people.
Allowing states to waive out of the Obamacare Community Rating provision would be a drastic change of course back to the bad old days when insurers were free to deny coverage to anybody who might actually be likely to need it. It would price millions of people with pre-existing conditions out of the market.
Allowing states to waive out of the Obamacare Community Rating provision would be a drastic change of course back to the days when insurers were free to deny coverage to anybody.
The new GOP proposal includes a fig leaf providing the pretense of cover for this unfortunate result. States wouldn’t be able to obtain a community-rating waiver just by asking for it. No, they would have to either establish a “high-risk” insurance pool, or participate in a federal high-risk pool that made coverage available to people with pre-existing conditions.
This fig leaf is as transparent as cellophane. Looking through it, one sees that high-risk insurance pools have a miserable track record. Sure, a handful of states have established successful pools. But they are in the minority. Over thirty states have experimented with high-risk pools over the last four decades. Most have failed due to under-funding and/or poor administration. In a comprehensive study of the history of state run high-risk pools, the Kaiser Foundation found:
These high-risk pools likely covered just a fraction of the number of people with pre-existing conditions who lacked insurance, due in part to design features that limited enrollment. State pools typically excluded coverage of services associated with pre-existing conditions for a period of time and charged premiums substantially in excess of what a typical person would pay in the non-group market.
So how do you feel about putting your medical care into the loving hands of a high-risk pool created by the Republican state legislatures of Arkansas, Alabama, Kansas or Oklahoma, to name just a few? Are you reassured?
But don’t worry, there’s a backstop! In order to obtain a waiver, the state would have to ask Tom Price for permission. It would have to convince him that the purpose of the requested waiver is to reduce premium costs, increase the number of persons with health care coverage, or “advance another benefit” to the public interest in the state.
Phew, that was close! And you were worried that getting waivers might be too easy!
Really, how hard do you think it will be for Republican-controlled states to convince Price that the purpose of the requested waiver would be to reduce premium costs, or “advance” some other supposed “benefit” to the state? Price has been one of the most strident critics of Obamacare in the Republican party. He is the author of proposed legislation to use state sponsored high-risk pools to cover people with pre-existing conditions, so it’s hardly credible to think that he will disapprove any state’s application to do so, especially if the application comes from a state controlled by Republicans.
Community rating is not the only dead man walking that would be nominally spared but effectively executed if the new GOP plan, or something like it, gets enacted into law. States would also be permitted to waive out of the Obamacare requirement that health care policies cover ten Essential Health Benefits:
- ambulatory patient services
- emergency services
- maternity and newborn care
- mental health and substance use disorder services
- prescription drugs
- rehabilitative and habilitative services and devices
- laboratory services
- preventive and wellness services and chronic disease management, and
- pediatric services, including oral and vision care
Nothing exotic here. Just a comprehensive package of basic health care coverage.
Although the Essential Health Benefit requirement would continue to be the nominal federal standard, that won’t help anybody who lives in a state that waives out of it. And it will be even easier for states to obtain waivers from the Essential Health Benefits than to obtain waivers from the community rating provision. All they will have to do is convince Price that doing so would ― wait for it ― “reduce premium costs” or “advance another benefit to the public interest.”
Well, of course cutting back on covered benefits will “reduce premium costs.” Sub-standard policies, by definition, cost less than policies that provide real coverage. That’s the only reason anybody would ever buy them.
Junk policies not only cost less, they cover less. Will those policies be adequate in times of need?
But junk policies not only cost less, they cover less. Will those policies be adequate in times of need? Not government’s problem, according to Republican thinking. If people want to buy low-cost policies that provide limited or no real coverage, they should be free to buy the coverage they want.
The key words here are “free” and “want.”
The “freedom” is the freedom to buy sub-standard, cut-rate policies that benefit only insurance companies. It is the freedom for people to pay money for policies that will be of little or no use to them in their time of need. It is the freedom to be bilked.
And nobody “wants” to buy a useless health care policy. They will be forced to do so, however, because the proposed Republican plan, unlike Obamacare, would neither require insurers to provide real coverage nor provide people with enough financial assistance to buy it.
None of this, of course, matters to our President. As I discussed in an earlier piece, “Trump Wants Health Care Legislation To Finance Tax Cuts, Not To Fix Health Care,” Trump doesn’t care what’s in a health care bill as long as he gets one that he can claim saves enough money to finance his beloved tax cuts.
If the proposed Republican health care plan, or something like it, is enacted into law, Trump will declare, falsely, that he has kept his promise to retain the ban on insurers denying coverage to people with pre-existing conditions. It will not matter to him that while the promise arguably will have been kept in form, it will have been thoroughly broken in substance.
And the saddest part is that he may not even know the difference.
Philip Rotner is an attorney and an engaged citizen who has spent over 40 years practicing law. His views are his own and do not reflect the views of any organization with which he has been associated. Follow Philip on Twitter at @PhilipRotner