The Congressional Budget Office will soon receive a pair of amended versions of the Senate’s Better Care Reconciliation Act, one of which has been crafted by conservatives Ted Cruz of Texas and Mike Lee of Utah.
The Cruz-Lee version of the bill is being touted as a potential compromise that could bring together the warring sides of the GOP by finding a way to satisfy both the most conservative members of the caucus, who want to see the ACA destroyed root and branch, and the more moderate members who don’t want to be accused of throwing millions of Americans off of their health insurance coverage.
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The proposal is relatively simple. It would allow insurers serving the individual market and accepting customers who purchase insurance with the help of federal subsidies to offer policies that do not conform with the coverage mandates enshrined in the ACA. So long, that is, as they also offer at least one plan that does meet all of the ACA’s mandates.
The idea is that the change would allow healthy individuals to choose to purchase bare bones insurance plans that carry much lower premium payments in exchange for various limits on coverage. That includes annual and lifetime caps on what policies will pay for care, restrictions on pre-existing conditions, limits on the kind of care eligible for coverage, including hospital stays, mental health treatment and more.
One of the primary objections to the Cruz-Lee plan is the effect it would have on people with pre-existing conditions. Although insurers would be required to offer policies open to even those who are already ill, the availability of lower-cost policies for those not in immediate need of care would drain healthy consumers from the risk pool. This would create an isolated group of consumers that would face higher and higher premiums and deductibles because of the concentration of those in need of expensive care.
The Cruz-Lee bill does offer generous subsidies to some Americans, but those aren’t available to people earning incomes that put them above the poverty level but well short of the “middle class.”
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What’s particularly puzzling about the Cruz-Lee plan though, is that it is likely to actually worsen the biggest problem the GOP has had when it comes to rallying support for its ACA replacement proposals: the number of people with insurance coverage.
Every time Republican lawmakers have submitted a bill to the Congressional Budget Office for analysis during the health care debate, the score has come back with a prediction of tens of millions of additional Americans without health insurance within a decade.
On its face, the Cruz-Lee plan seems designed to avoid that problem. Allowing insurers to offer cheap coverage plans, the theory goes, will entice more people to get covered. But there is a glaring flaw in this idea -- one that the CBO itself as well as Congress’ own Joint Committee on Taxation has pointed out: Low-cost insurance plans that offer only limited protection from medical and/or financial disaster won’t be counted as actual insurance when legislation is given a budget score.
Writing last year, CBO’s Susan Yeh Beyer and Jared Maeda warned, “If there were no clear definition of what type of insurance product people could use their tax credit to purchase, some of those insurance products would probably not provide enough financial protection against high medical costs to meet the broad definition of coverage that CBO and JCT have typically used in the past—that is, a comprehensive major medical policy that, at a minimum, covers high-cost medical events and various services, including those provided by physicians and hospitals.”
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In conclusion, they said, “CBO and JCT would not count those people with limited health benefits as having coverage.”
Assuming that CBO sticks to these principle in assessing the coverage impact of the Cruz-Lee proposal -- and there is no reason to believe it won’t -- the findings seem practically foreordained. Once again, Republicans will be looking at an ACA alternative that lowers costs and cuts taxes at the expense of reducing the number of Americans who have meaningful access to healthcare and protection from financial calamity.
Having traveled this road multiple times in the recent past, it’s not at all clear why GOP senators are so keen to go down it another time.
