One of the difficulties in judging health care legislation is that both political parties attempt to put their spin on what a bill does or doesn’t do. That’s why it’s handy to have the Congressional Budget Office (CBO) to weigh in on hot-button legislation. Since 1975, the CBO has acted as a kind of umpire for Congress by analyzing what the potential impact of a bill might be.
This week, the CBO, along with the United States Joint Committee on Taxation, issued its final report on the current version of the American Health Care Act (AHCA), the proposal that would repeal and replace the Affordable Care Act. Overall, the CBO report estimated that the AHCA bill as passed by the House would result in 23 million fewer Americans having health insurance in the next decade.
Read more: The AHCA – What Happens Now?
The CBO report did have specific passages focusing on those who utilize health care the most, including those who have preexisting conditions like Type 1 diabetes. Here are five important points on this subject from that report:
1. Not all health plans deserve the name.
One reason the CBO estimates that so many would be left without health insurance is that the AHCA would allow states to relax rules on what constitutes health insurance. This may mean that insurance companies could offer plans that really aren’t adequate when it comes to providing coverage.
The CBO frowned on these insurance-light plans:
“CBO and JCT broadly define private health insurance coverage as consisting of a comprehensive major medical policy that, at a minimum, covers high-cost medical events and various services, including those provided by physicians and hospitals. The agencies ground their coverage estimates on that widely accepted definition, which encompasses most private health insurance plans currently offered in the group and nongroup markets. The definition excludes policies with limited insurance benefits (known as mini-med plans); ‘dread disease’ policies that cover only specific diseases; supplemental plans that pay for medical expenses that another policy does not cover; fixed-dollar indemnity plans that pay a certain amount per day for illness or hospitalization; and single-service plans, such as dental-only or vision-only policies. In this estimate, people who have only such policies are described as uninsured because they do not have financial protection from major medical risks.”
2. Instability in the market would cause rates to rise for people who are less healthy.
The AHCA would allow states to give insurance companies permission to charge more to cover people with preexisting conditions. This could price less healthy people out of the market, even in states that stick to the policy of requiring insurance companies to set premiums based on a community rating (or not charging people with preexisting conditions more):
“CBO and JCT expect that, as a consequence, the waivers in those states would have another effect: Community-rated premiums would rise over time, and people who are less healthy (including those with preexisting or newly acquired medical conditions) would ultimately be unable to purchase comprehensive nongroup health insurance at premiums comparable to those under current law, if they could purchase it at all—despite the additional funding that would be available under H.R. 1628 to help reduce premiums. As a result, the nongroup markets in those states would become unstable for people with higher-than-average expected healthcare costs. That instability would cause some people who would have been insured in the nongroup market under current law to be uninsured.”
3. Repealing a requirement for essential health benefits might mean more out-of-pocket costs for insulin or other drugs.
The AHCA would grant states the ability to waive what are considered “essential health benefits,” and allow for lifetime caps on how much an insurance plan is willing to spend for a condition. This could especially drive up out-of-pocket costs for those who need expensive drugs:
“Although premiums would decline, on average, in states that chose to narrow the scope of (Essential Health Benefits), some people enrolled in nongroup insurance would experience substantial increases in what they would spend on health care….Moreover, the ACA’s ban on annual and lifetime limits on covered benefits would no longer apply to health benefits not defined as essential in a state. As a result, for some benefits that might be removed from a state’s definition of EHBs but that might not be excluded from insurance coverage altogether, some enrollees could see large increases in out-of-pocket spending because annual or lifetime limits would be allowed. That could happen, for example, to some people who use expensive prescription drugs. Out-of-pocket payments for people who have relatively high health care spending would increase most in the states that obtained waivers from the requirements for both the EHBs and community rating.”
4. Your employer might become your lifeline for coverage.
The CBO believes that employers might be more reluctant to drop healthcare coverage in states that opt for relaxed rules on the health insurance industry. However, it won’t be enough to offset the other hurdles to coverage:
“On net, in those states, the increase in nongroup coverage for healthy people and the decrease in coverage for less healthy people would result in an overall decrease in nongroup coverage. Because of extensive changes to regulations and the inability of less healthy employees to obtain comprehensive coverage, the agencies expect that employers would be even more likely to continue offering coverage than in states making moderate changes. Consequently, some less healthy people would find coverage through an employer, but some other less healthy people would become uninsured.”
5. Healthy people would become the “haves” and less healthy people would become the “have-nots” when it comes to affordability of coverage.
In states which relax the rules under the AHCA, healthy individuals would be able to obtain cheaper health insurance based on their good health status, while those with health issues would opt for plans under the community rating plans. The latter plans would get more expensive as healthy people opted out of them:
“Because many healthy individuals would be able to obtain plans with underwritten premiums as long as they remained healthy, CBO and JCT anticipate that less healthy people or those with preexisting medical conditions would opt for community-rated premiums and that those premiums would rise over time. Eventually, CBO and JCT estimate, those premiums would be so high in some areas that the plans would have no enrollment. Such a market would be similar to the nongroup market before the enactment of the ACA, in which premiums were underwritten and plans often included high deductibles and limits on insurers’ payments and people with high expected medical costs were often unable to obtain coverage.”
Read more: What the MacArthur amendment means for people with Type 1 diabetes
Of course, as soon as the ink dried on this report, Republicans and Democrats began to argue about what it says. Democrats pointed to the finding that the bill would cause millions to lose coverage, while Republicans focused on how the bill was found by the CBO to be deficit neutral.
The Senate is taking up the AHCA, and it is expected to offer major changes to the legislation. The House version of the bill was passed before the CBO could score it.
You can read the full report here:
https://www.cbo.gov/system/files/115th-congress-2017-2018/costestimate/hr1628aspassed.pdf
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