When Senate Majority Leader Mitch McConnell, R-Ky., initially unveiled the Senate's healthcare reform bill, the Better Care Reconciliation Act, conservatives inside and outside of Congress criticized the bill for maintaining Obamacare's regulations that increase the cost of insurance and make coverage unaffordable for millions. However, the newest version of the bill removes many of these regulations and takes greater strides towards making health insurance less expensive.
The original version of the BCRA made few changes to Obamacare's insurance rules. Under the plan, insurers would still be prohibited from charging healthy individuals lower premiums than sicker and more-expensive subscribers. This rule increases the cost of insurance on younger and healthier individuals and makes it harder for many to afford health insurance. In addition, the original BCRA maintained the law's mandatory "essential health benefits," which force everyone to purchase a variety of expensive and often unnecessary services, even if enrollees don't need or desire them. As a result, premiums have increased more than 105 percent since 2013.
Yet despite the heavy toll of Obamacare regulations on families, Senate Republican leaders initially chose to maintain these rules in order to garner support from moderate Republicans who fear vulnerable patients will lose access to coverage if they repeal these rules.
Fortunately, Senate leaders last week introduced changes to the BCRA that would dramatically diminish the law's insurance rules while also protecting patients with pre-existing conditions. The revisions are modeled after an amendment introduced by Sens. Mike Lee, R-Utah, and Ted Cruz, R-Texas, called the Consumer Freedom Option. Under their amendment, any insurer that sells Obamacare-compliant coverage will also be free to sell cheaper plans with fewer unnecessary benefits.
In an interview on the Mark Davis radio show, Cruz said: "You want to keep your mandates? Knock yourself out with your mandates, but in addition to mandates let's let [patients] buy the plans they want, let's let [patients] buy the benefits they want and let's let them get lower prices so that more families who are struggling can actually afford health insurance."
Democrats and moderate Republicans predictably worry that Cruz's amendment would send Obamacare's insurance plans into a death spiral by allowing young and healthy individuals to purchase cheaper non-Obamacare plans. However, the BCRA's updated version allocates significant funding to ensure patients with pre-existing conditions aren't priced out of coverage.
The bill spends $70 billion, in addition to the original bill's $112 billion, towards a fund to help insurers pay medical expenses for high-cost patients. The fund is modeled after Maine's extraordinarily successful high-risk pool program. Under this initiative, insurers identify patients with pre-existing conditions, like prostate cancer or rheumatoid arthritis, and the high-risk pool covers their medical expenses beyond a certain level.
These reforms not only made it easier for sick patients to access medical care, they also decreased premiums for everyone. Shortly after these changes went into effect, individuals in their twenties saved $5,000 in lower premiums while those in their sixties saved $7,000 in annual premiums.
But these policies offer far greater benefits than lower premiums. As insurance becomes more affordable to growing numbers of families, particularly poor families, more will buy coverage and gain healthcare security. According to the Congressional Budget Office, every 10 percent fall in insurance premiums reduces the uninsured rate by 5.7 percent.
Obamacare ultimately failed to cover the uninsured because people simply cannot afford the law's one-size-fits-all insurance. Despite Obama's best efforts, the high cost of insurance remains the number one reason the uninsured opt-out of coverage. Senate Republicans should learn from Obama's failed law and empower consumers to buy the best health plan for their individual needs at the lowest price.
Charlie Katebi is a contributor to the Washington Examiner's Beltway Confidential blog. He is an advocate at Young Voices and a policy fellow at the Millennial Policy Center.
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