UPDATE: House Speaker Paul D. Ryan has pulled the GOP’s Obamacare repeal bill, canceling a vote that had been scheduled for Friday afternoon. The move appears to signal that the repeal effort is dead, at least for the near future.
We were perhaps a bit too negative when we observed after the election that Republicans could vandalize the Affordable Care Act, even if they couldn’t fully repeal it. True vandalism, after all, doesn’t help anybody. The Republican healthcare bill due to be voted on Friday, by contrast, does have its winners: the wealthy, who will be in line for a tax break worth $346 billion over 10 years.
The losers? Everyone else. That’s because the measure, as currently written, is almost certain to destroy the individual health insurance market and Medicaid. Nor will other health insurance markets be immune from damage, although the scale of the wreckage is harder to gauge. Suffice to say that many of the ACA’s consumer protection guarantees, which would be eviscerated by the House GOP’s so-called American Health Care Act, also apply to employer insurance. Losing them could be costly.
Early in the day, whether the bill will pass the House appeared up in the air. Its prospects were even more uncertain in the Senate. But a House vote scheduled for about 3:45 p.m., Eastern time, instead got canceled. House Speaker Paul D. Ryan (R-Wis.) didn’t have the votes. The request to postpone came from President Trump, who the day before had demanded a vote regardless of the outcome.
Let’s take a look at what was at stake as the GOP embraced a scorched-earth insistence on mindlessly hurtling toward ACA repeal.
First and foremost, the measure eliminates the ACA’s requirement that insurers cover 10 essential health benefits. As we reported this week, gutting those EHBs will allow insurers to offer insurance plans with lower premiums, but that won’t be worth the money. Under the ACA, all health plans must cover hospitalization, prescription drugs, mental health and substance addiction treatment and outpatient treatment, among other things. (More on that below.)
The House measure punts the definition of “required benefits” to the states. The consequences of this change would be to create up to 50 separate standards for what gets defined as “health insurance,” with a resulting race to the bottom. Insurers will be happiest in states with the most indulgent rules, and wariest of those that still require reasonable benefits — consumers in those states might find premiums rising sharply.
But the hastily drafted language in the bill is a confusing mess, reports Nicholas Bagley of the University of Michigan. Worse, because it becomes effective on Jan. 1, 2018, it leaves very little time for insurers to adjust their rates and offerings for the new regime. Bagley says this portends wholesale abandonment of the individual market by insurance companies, at least temporarily. “Insurers are likely to walk,” he writes. “All of them. The individual market in 2018 will be a ghost town.”
The House bill threatens to vaporize protections for people with pre-existing medical conditions, the consumer provision perhaps most valued by the public and most consistently promised by even the most ardent critics of the ACA. The elimination of EHB requirements would allow insurers to exclude these consumers without explicitly saying so.
We’ve warned of the danger to anyone who has even a minor medical procedure, much less a chronic condition, in his or her past. Under the latest revisions to the AHCA, crafted to bring hard-core conservatives on board, protection against losing or being denied insurance because of one’s medical history is gone.
The original draft of the GOP bill went partially down this road by removing the requirement that health plans carry a minimum actuarial value — the percentage of medical costs covered — of 60%. That’s for bronze-level plans. Benchmark silver plans, on which the ACA’s premium subsidies are based, must offer 70%, at least. By eliminating EHBs, the latest draft travels all the way down the highway.
The conservative fans of eliminating EHBs argue that this will lead to lower premiums. That may be true, in a way. But the impact of the change will fall very unevenly, and will produce crummier insurance coverage for almost everyone. Among the big losers will be women and growing families, largely because pregnancy and maternity coverage is likely to become a dim memory. As we pointed out, prior to the ACA, only 18 states required maternity coverage for any plans, and only 11 required it for all plans.
Conservatives and Republicans have displayed their insensitivity to this problem in many ways, though perhaps none as cavalierly as Sen. Pat Roberts (R-Kan.), who replied sarcastically to a reporter’s question Thursday about whether he supported gutting the EHBs by saying, “I wouldn’t want to lose my mammograms.” Perhaps aware that his remark could go down as the most stupid and heartless statement in the history of the healthcare debate, he quickly apologized.
But Roberts still showed rank ignorance about what the EHBs include and why they’re needed. Before the ACA, according to the Center on Budget and Policy Priorities, 62% of enrollees in the individual market did not have coverage for maternity services, 34% did not have coverage for substance abuse, 18% did not have coverage for mental health services, and 9% did not have coverage for prescription drugs.
David Anderson of Duke University, an expert in insurance plan design, explains how insurers would use their newfound freedom to exclude potentially costly customers:
“The first stream of product design will be aimed to cover very little,” he writes. “They will be very narrow networks with no major academic medical centers involved; their benefits will be designed to drive away sick people with chronic conditions. For instance, asthma inhalers or insulin or Epi-Pens might not be covered. Hep[ititis]-C drugs would not be covered. Maternity care would not be covered except after a $15,000 stand-alone deductible. They will use donut benefit designed principles where the first couple of PCP visits are no cost sharing but everything else comes with $300 co-pays and $20,000 deductibles. Utilization is designed to be very low and the population that will choose these policies will have to be very healthy.”
What if you’re not healthy? “The other path of coverage is a full service insurance for the sick. It is a privatized and non-inclusive high cost risk pool. It will offer a network with top tier hospitals, it will cover chemotherapy. It will cover the cost of chronic disease management .… It will be massively out of reach for most people with chronic conditions as the subsidies will be grossly inadequate and the cost of care for some conditions are more than half the median income of an American family.”
The damage that could be done by the original GOP bill has been well documented. It strips $880 billion from Medicaid over 10 years. By imposing much higher costs on states, this provision would all but guarantee lower services for the neediest American families. The latest version of the bill hastens the end of the ACA’s Mediaid expansion.
The bill encourages health insurance companies to pay their top executives more, by allowing more of their compensation to be deducted from their companies’ taxes — placing a higher burden on all other taxpayers. In all, as the Congressional Budget Office stated in its analysis of the original bill, it would cost 24 million Americans their health insurance; the newest version, according to the CBO, does the same, albeit at higher cost.
As their Congress members cast their votes Friday, every American should be asking: Why would they contemplate this?