With the right flank of House Republicans endorsing a rewrite of the American Health Care Act, students of health reform are trying to understand how insurance markets might change in 2018, or more dramatically in 2020.
The latest version of Obamacare repeal and replace would leave it up to the states on how much insurers can charge older customers beginning next year. In 2020, it would allow states to apply for a waiver to change the 10 essential health benefits now required to be part of nearly all health insurance plans.
How many states will back away from today's structure? How dramatically will they allow companies to scale back coverage? How many consumers would be pushed out of the market, because the cost of riders for certain benefits are beyond their reach? All of that is unclear at this stage of the game.
Timothy Jost, an emeritus law professor at Washington and Lee University who supports the Affordable Care Act, doesn't believe that many states would apply for a waiver. "It probably would be even fewer that would try to make dramatic changes," he said. "Once you give people benefits, it's harder to take them away."
The waivers also would allow states to choose to end community rating and return to medical underwriting. Even if states chose to scale back the essential health benefits but leave community rating in place, it would have significant consequences for people who needed services that were no longer in the required package, said the Commonwealth Fund's Sara Collins.
"Even though the amendment leaves in place the law's ban on pre-existing condition exclusions, that could effectively accomplish the same thing, by leaving out benefits like chemotherapy or care for HIV," she said. "So someone who did have problems like that would be forced to buy a plan—if they could find one—that was priced much higher."
University of Chicago professor Harold Pollack said: "If you do away with the essential health benefit, you are opening the door to insurers doing overt and covert ways of trying to avoid covering unprofitable consumers.
"That puts insurers themselves in a very difficult situation. I don't think they want to be in the business of chasing away sick people as business model," he said.
Health insurers, many of which have withdrawn from the exchanges, have said they don't want the country to return to a pre-ACA status quo. Blue Cross and Blue Shield of Illinois officials said yesterday that proposed changes being discussed in Congress could force the insurer to rethink its continued role on the insurance exchange and how it prices premiums.
Chris Jacobs, a conservative policy analyst, noted Wednesday that no Republican governors have expressed interest in applying for the waivers envisioned in the AHCA. He asked: "With 36 governors' races on the line next fall, how many governors will want to implement waivers for the 2019 plan year—thus guaranteeing Obamacare will be an issue in the last week of their campaigns."
If states are granted waivers to return to medical underwriting, they would be required to institute high-risk pools or a reinsurance program designed to keep sicker customers covered.
Pollack said when states had high-risk pools, those patients cost $7,000 to $10,000 a year more than a typical customer. Providing adequate funding to help insurers make up the costs doesn't improve the federal budget picture. And that was when those high-risk pools contained lifetime limits, something that no longer exists in any part of the market after Obamacare.
The goal of any of these changes, according to the bill's authors, is to reduce healthcare premiums for the majority of customers. But a study from Milliman suggests that the benefits most likely to be removed—mental health/substance abuse and maternity care—are not major cost components.
If all consumers share in the cost of maternity coverage, it costs $8 to $14 per person, per month. Being forced to buy a rider during childbearing years could cost 25% to 70% more each month than other customers the same age.
While the conservative Freedom Caucus's endorsement of the AHCA rewrite gives the bill some momentum, its prospects of becoming law are still unknown. There might be enough votes to sink it in the House between moderate Republicans and a united Democratic caucus.
For instance, Rep. Frank LoBiondo (R-N.J.), tweeted Wednesday that the changes to the bill don't satisfy him. That's because it still curtails the Medicaid expansion after 2020, something LoBiondo said was "VERY REAL" for South Jersey.
Even if the AHCA did pass the House, it could run into trouble in the Senate, either because there aren't 51 votes, or because it wouldn't clear procedural tests under the so-called Byrd rule, which allows for any bill moving along the budget reconciliation process, like the AHCA, to be blocked for containing provisions that aren't directly related to the federal budget.
While the AHCA's fate is quite murky, the status of cost-sharing reductions seemed to firm up a little on Wednesday. Shortly after House Majority Leader Paul Ryan (R-Wis.) told reporters that Congress would not include funding in its continuing resolution this week, other reports said President Donald Trump reassured Congress that the administration would continue to make the payments to insurers.
Pollack, who is a liberal Democrat, said even without a halt to the payments, health insurers might not find the frequently changing message on CSRs palatable. "If the executive branch and Congress can't get it together to create some predictability about this fundamental issue, that would lead me, if I were an insurance company executive, to think: Do I really want to be involved in that?"
Insurance CEOs may decide that it is too wild of a ride. "That's what I'm worried about. I think the partisan politics of this is very beneficial to Democrats, but the on-the-ground reality of it is devastating," Pollack said.
