The bipartisan compromise: cheap, worthless plans

Bipartisan moves to steady insurance market face same old conflicts over regulation

By Harris Meyer
Modern Healthcare, August 3, 2017

Democrats and a growing number of Republicans are eager to steady the struggling individual market covering nearly 20 million Americans to prevent an exodus of insurers and healthy customers.

Senate HELP Committee chairman Lamar Alexander (R-Tenn.), who has scheduled committee hearings early next month on how to stabilize the market, wants to go further. He has proposed expanding state innovation waivers to allow states to waive ACA insurance requirements such as minimum essential health benefits. A bipartisan group of 40 House lawmakers, calling themselves the Bipartisan Problem Solvers Caucus, has offered a similar proposal.

The GOP goal is to allow insurers to lure more healthy people into the market by offering lower-priced plans. "Any solution… should also include greater flexibility for states in approving health insurance policies," Alexander said.

Alexander also wants to let everyone buy very high-deductible catastrophic plans, erasing the ACA's age cap of 30. That could conceivably win support from some Senate Democrats who offered a bill in 2014 to let insurers sell cheaper "copper" plans, with a lower actuarial value than bronze plans. It raises big concerns, however, among insurance leaders and experts who say consumers can't afford the deductibles and cost sharing under current plans.

Alexander also might try to revive a bill he introduced with his Tennessee GOP Senate colleague Bob Corker earlier this year to help consumers in counties where no exchange plans are being offered. The bill would let them use ACA premium tax credits buy plans sold outside the exchanges, including plans that do not comply with ACA coverage rules.

The Bipartisan Problem Solvers Caucus seeks changes in Section 1332 (which lets HHS grant states waivers to establish their own, customized coverage systems) to make it easier for states to win approval for setting up their own systems and to give them more leeway. House lawmakers also want to make it easier for states to enter into compacts that allow insurers to sell health plans across state lines in participating states.

ACA supporters and insurers say they're potentially open to making 1332 waivers easier to get and more attractive to states, but only within limits. "My sense is there's a willingness to expand state flexibility on 1332 waivers, it's got a lot of potential," said (Tom Daschle, the former Democratic Senate Majority Leader who's now a healthcare lobbyist at Baker Donelson), who issued joint recommendations on that issue with former Republican House Speaker Newt Gingrich in late 2015.

Despite the looming policy clashes, some observers see a narrow window for a compromise deal on a market stabilization bill, especially since some Democrats in the past have signaled openness to letting insurers sell cheaper, skinnier plans.



By Don McCanne, M.D.

One of the great faults of the Affordable Care Act is that it was designed to make plans cheaper (lower premiums) by reducing the actuarial value of the plans (the percent of health care costs that the plans would cover) by requiring higher out-of-pocket costs, especially high deductibles. Although federal subsidies have softened the burden, cost sharing has made health care much less affordable, especially for middle-income Americans. Now Congress wants to make this problem even worse.

In the name of bipartisanship, Congress would supposedly save the individual health insurance market by making plans more affordable. They would do this by allowing an even lower actuarial value - higher deductibles - thus shifting more of the costs to individuals who actually need health care. They would also allow a reduction in the benefits covered, perhaps eliminating obstetrical care, mental health services, drug dependency programs, and preventive health services. Increasing out-of-pocket costs and stripping out benefits from the plans is the exact opposite of what most Americans want.

Of course, this would not salvage the individual market. If the premiums were low enough, healthier individuals might buy these cheap plans. Given a choice, many of the healthy would not buy the more expensive, more comprehensive plans. It is the individuals with significant health problems that would buy the higher actuarial value plans. Concentrating high cost individuals in these plans would cause the premiums to skyrocket, making them unaffordable for most, and the market would collapse in a “death spiral.” In the meantime, those buying the cheap plans who then develop significant medical problems would find that they are insolvent or bankrupt because of the unaffordable cost sharing. So the market for cheap plans wouldn’t work ether.

Yes, many people are unhappy with the high premiums that they are paying and want something done about it, but, no, they do not want their plans replaced with skimpy, almost worthless coverage that potentially leaves them exposed to insurmountable debt.

What do Americans want? They want to have the health care that they need, when they need it, without having to negotiate significant financial barriers to that care. In other words, they want a single payer national health program. Numerous polls have shown that they are beginning to grasp that concept.

Congress is going home for the summer recess. Republicans will face angry voters who feel that they have been betrayed by the failure of the Republicans to deliver on their false promises for a better health care system. The Democrats will mount their white horses to spread the message that they are ready to work with the Republicans to make health insurance more affordable. Neither camp will be honest with the voters and let them know what the low actuarial plans they have in mind really are, and how little health care the plans will actually cover.

What is our task? Members of Congress returning to their home districts must hear from us, their constituents - in the loudest, most unequivocal terms possible - how we reject the fraud of cheap health insurance, and that we demand the proven model of single payer national health insurance - an improved Medicare for all.

Get out your bullhorns!

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