The senators behind the last shot at overhauling Obamacare are fighting back against criticisms that their bill will erode protections for people with pre-existing conditions by saying that states can solve the problem.
The bill aims to provide Obamacare funding for the Medicaid expansion and federal healthcare subsidies to states through block grants. A key provision is letting states waive a protection called community rating that prevents insurers from charging sicker people more money than healthy ones.
The provision has been met with much skepticism from patient and doctor groups. America’s Health Insurance Plans, the insurance industry’s top lobbying group, also was concerned, saying the bill would pull back protections for pre-existing conditions.
Under the bill, a state that wants a waiver from community rating has to prove that it will still provide adequate and affordable coverage for people with pre-existing conditions. However, adequate and affordable have not been defined, as that would be largely up to the secretary of Health and Human Services.
The bill does not let states waive a separate mandate that requires insurers to provide coverage to people with pre-existing conditions, which vary from diabetes to cancer. Experts have repeatedly said that without community rating, people with pre-existing conditions can still buy healthcare coverage but it wouldn’t be affordable.
Sen. Bill Cassidy, R-La., one of the bill’s co-sponsors, told the Washington Examiner Tuesday that states have a slew of options to take care of people with pre-existing conditions.
“They have a choice of things. Invisible high-risk pools is one example,” he said.
A regular high-risk pool works by putting sick people into their own insurance pool, with the costs subsidized by the state. Under an invisible high-risk pool, a sick person doesn’t know he is in a separate insurance pool.
Maine’s invisible high-risk pool was funded by a surcharge on every insurance plan sold in the individual market, which is used by people that don’t have employer-based insurance.
Cassidy said the waivers would let states craft the idea that works best for them.
“One thing about the Maine invisible high risk was it is their idea,” he said. “I don’t think we should try to guess what creativity would manifest itself.”
Other ideas include a regular high-risk pool or a reinsurance program in which a state helps cover the sickest claims.
But other efforts to overhaul Obamacare have come back to the same problem with invisible high-risk pools: funding.
The House’s Obamacare repeal bill included about $23 billion for high-risk pools and a state waiver for community rating. The nonpartisan Congressional Budget Office said the approach would lead to higher costs for sick people and the funding wasn’t enough.
Sen. Susan Collins, R-Maine, said her state’s idea worked because it had a lot of money. She has previously said that $15 billion a year would be needed to adequately maintain the program.
A Congressional Budget Office score on how the bill, also sponsored by Sen. Lindsey Graham, R-S.C., would affect insurance coverage and premiums won’t be available for weeks. The agency plans to release a preliminary estimate on how the bill will affect the deficit on Monday.
Cassidy shrugged off concerns about whether there will be enough costs for states to maintain an invisible high-risk pool or reinsurance program.
“Maine levied a $4 tax upon all policies in their state,” he said. “There is nothing to keep them from doing that” in the new bill.
The consulting firm Avalere Health released an analysis that found the bill would cut federal health funding by $4 trillion over 20 years and more than $200 billion up to 2026.
Cassidy has been sparring with late night comedian Jimmy Kimmel, who blasted the bill during his show Tuesday night. Cassidy came on Kimmel’s show in May to talk about his requirement for a “Kimmel test” that no family would be denied medical care because they couldn’t afford it.
Kimmel said the bill would not do that and that Cassidy lied to him when he came on the show.
Cassidy responded on Wednesday that the bill does meet the “Kimmel test” he laid out back in May, adding that the bill requires states that get a waiver to provide adequate and affordable coverage.
“We think that if you say ‘adequate and affordable,’ a reasonable person would say it’s got to be about the same price,” he said on MSNBC Wednesday.
