Insurers shred Senate health care bill: “Premiums will skyrocket for preexisting conditions”


https://www.vox.com/policy-and-politics/2017/7/15/15976244/senate-health-care-bill-health-insurance-companies-letter

Health insurance companies have largely bit their tongues about the Senate health care plan, but they are turning against it now, warning that a recent revision would send premiums skyrocketing for people with high medical costs.

The insurance industry has been one of the few health care sectors to even tentatively embrace the Senate’s plan, as Vox has documented, but that has changed in the last few days. Their most influential representatives in Washington — America’s Health Insurance Plans and the Blue Cross Blue Shield Association — sent a letter to Senate leaders Friday urging them to remove Sen. Ted Cruz’s amendment from the legislation.

The Cruz amendment, added in the revised Senate plan, would allow health plans to sell insurance on the individual marketplaces that does not comply with Obamacare’s insurance regulations as long as they also sold plans that did comply. Outside experts have warned this would segment the market, with healthy people buying skimpier non-Obamacare coverage and sicker people buying more robust Obamacare plans.

That would then send costs, and in turn premiums, spiraling upward in the Obamacare market, the insurance trade associations warned in their letter. They noted particularly that middle-class families who do not qualify for financial assistance would not be shielded at all from those increasing premiums.

“As healthy people move to the less-regulated plans, those with significant medical needs will have no choice but to stay in the comprehensive plans, and premiums will skyrocket for people with preexisting conditions,” the groups said.

The Senate does include $70 billion to offset increased costs under the Cruz amendment. But that money does not appear to be enough to assuage the insurance industry’s concerns.

“Finally, this provision will lead to far fewer, if any, coverage options for consumers who purchase their plan in the individual market,” the groups said. “As a result, millions of more individuals will become uninsured.”

It is unclear whether the Cruz amendment will be evaluated as part of the Congressional Budget Office score of the Senate bill to be released this coming week. A source familiar with the situation told me that the US Department of Health and Human Services office of planning and evaluation has been asked to review the proposal and its cost and coverage implications.

The insurance groups urged Senate Republicans leaders to remove the Cruz provision from the legislation.

Dave Dillion, an expert with the Society of Actuaries, told me Friday that part of the insurance industry’s objections is likely the uncertainty that the Cruz plan would introduce to the insurance market.

“I think while obviously a lot of carriers have not been enthralled with [Obamacare], you get comfortably number, you know the rules, and you go on about your business,” he said, adding of the Cruz proposal: “There’s so much uncertainty about what it really means. It’s not black and white.”

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