The latest version of the Senate’s Better Care Reconciliation Act is little changed from the original, except for one provision that promises to make life more miserable and unaffordable for Americans with pre-existing conditions who must buy insurance on their own.
Here’s the story.
Before the Affordable Care Act was passed, the individual insurance market was a hostile place for people with pre-existing conditions. Insurers could and did turn them down outright, charge them extra premiums, or only agree to sell them health plans that excluded coverage of the very health problems for which they needed insurance.
It was no picnic for healthy people, either; lured by low premiums, all too often they unknowingly bought plans with bare-bones benefits that turned out to be completely inadequate if their luck ran out and they had a serious illness or accident.
The ACA fixed those problems by setting minimum coverage standards for all plans and prohibiting insurers from excluding or charging extra to people with pre-existing conditions.
What the new bill does
The latest version of the revised health bill would fully restore the consumer-unfriendly pre-ACA state of affairs. It would work like this: as long as a health insurance company offers at least one Silver and Gold plan on the state exchange that meets all consumer protection requirements, it could sell essentially whatever kinds of plans it wants off the exchange. It could charge sick people astronomical premiums or refuse to cover them at all. It could sell plans with meager benefits, covering very few types of medical treatments.
By siphoning off healthy people into those cheaper noncompliant plans, the revised health bill would force the compliant plans to raise their premiums to cover the medical expenses of an older, sicker customer base.
“It’s horrible for people with chronic disease because it basically makes the exchange plans a high-risk pool,” explains Dania Palanker, a health policy expert at Georgetown University.
Less-generous subsidies, higher deductibles
The premium subsidies built into the Senate bill, though much less generous than the ACA’s, would give low- and moderate-income people some protection against the soaring premiums. But they would still be facing deductibles of $7,000 or more. That’s because the cost-sharing subsidies built into the ACA, which reduced out-of-pocket expenses for low-income households, would be gone.
The healthy people buying the bare-bones plans would save money as long as they stayed healthy. But if they got sick, “it would be a mess,” says Karen Pollitz, who follows the private health insurance market for the Kaiser Family Foundation.
First, they’d soon discover their skimpy plans didn’t cover all their medical needs. Second, they would face a six-month waiting period before they would be allowed to switch over to a full-protection plan.
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Nancy Metcalf is an award-winning independent journalist specializing in health topics. A senior writer and editor for Consumer Reports for more than 25 years, she is a nationally recognized expert on health insurance and health reform.