At long last, the conservative Freedom Caucus has reached a consensus on repealing and replacing the Affordable Care Act (ACA), known as Obamacare. The agreement reached with members of the moderate Tuesday Group, called the MacArthur Amendment to the American Health Care Act (AHCA), would allow states to obtain exemption waivers from a number of burdensome Obamacare regulations.
The irony? The proposal is noticeably weaker than the original AHCA legislation.
The MacArthur Amendment offers three key waivers – what the media has termed “opt-outs” – for individual states. The first relaxes Obamacare’s “community rating” provision, which currently mandates a 3-to-1 price ratio based on age, allowing states to restore the average ratio of 5-to-1 if they choose. This would start in 2020.
The second exempts them from Obamacare’s mandated “essential health benefits” for the small-group and individual insurance markets beginning in 2018, allowing states to establish their own EHBs once again. This one begins in 2018.
The third waiver allows insurers to once more consider the health status of previously uninsured applicants in pricing plan offerings for these individuals, starting in 2019.
As with everything else, there’s a catch to these waivers. State applicants must meet a complex set of requirements by demonstrating how their respective plans will lower premiums, increase insurance enrollment, stabilize the market for insurance coverage, and achieve other goals. The waivers would be automatically approved by the Department of Health and Human Services – unless their application is rejected within 60 days for failure to meet the standards.
So long as President Donald Trump, assisted by HHS Secretary Tom Price, is in charge of administering the waivers, applicants may have a better shot at guaranteed approval. But what if a new president – say, President Elizabeth Warren – takes office and begins an effort to decline proposals with which he or she disagrees? Then the point of the waivers becomes moot.
There’s something strange about the new proposal, which Freedom Caucus Chairman Rep. Mark Meadows (R-NC) worked out with Rep. Tom MacArthur (R-NJ), given the previous opposition of at least half of the Caucus (including Rep. Meadows) to the version of the AHCA that was pulled on March 24.
The so-called “opt-out” replaces what was originally a built-in feature of the AHCA. The previous bill altogether eliminated community rating and the essential health benefits. This new bill permits states to apply for waivers to get out of both mandates – a far weaker provision.
It is difficult to fathom why many members of the Freedom Caucus would audaciously oppose the original legislation yet support this new, watered-down amendment.
The case behind the MacArthur waivers is that it “gives states flexibility” and, in effect, bolsters federalism. It is usually a good thing when states can exercise authority to make things work as the state sees fit. But given the expansive requirements for a waiver to be handed out, the “flexibility” argument is tenuous at best.
States will need to come to HHS on bended knee and appeal to the department for a waiver. The almighty feds can choose to deny the application at will, and all it takes is President Warren to make that happen.
The reality is that the so-called “opt-out” is really a cop-out. It allows Republicans to go home to their constituents and claim victory on Obamacare while really just attempting to pass along much of the real decision-making and political risk to state governments. This also puts citizens of states with Democratic leadership at serious risk of being stuck with the onerous federal regulations.
Let’s take my home state of Colorado. Democratic Governor John Hickenlooper and his potential Democratic successor, Congressman Ed Perlmutter (who voted for Obamacare in 2010), are highly unlikely to apply for a waiver. This means that Coloradans will be stuck with EHBs and community rating prohibitions that drive up costs, all because the MacArthur Amendment would essentially preserve these regulations. What kind of relief is that for Coloradans like me who can’t afford health insurance?
I supported the AHCA and would have voted for it. Unfortunately, the MacArthur Amendment’s “opt-out” provisions are nothing more than a political cop-out that deeply risk keeping in place some of the prime cost drivers in the system.
