Not satisfied with a raft of legislative and administrative steps likely to drive up health premiums just as voters turn their attention to the November elections, a coalition of conservatives on Tuesday unveiled another attempt to kill the Affordable Care Act.
This one also has Republican fingerprints on it. The “Health Care Choices Proposal” advanced by the Health Policy Consensus Group closely tracks the so-called Graham-Cassidy healthcare bill proposed by Sens. Lindsey Graham (R-S.C.) and Bill Cassidy (R-La.) that enjoyed a brief moment in the sun last fall before fading away. The sponsoring group comprises the Heritage Foundation, the free-market Galen Institute, the right-wing Goldwater Institute and former Sen. Rick Santorum (R-Pa.), among others.
Like Graham-Cassidy, the latest proposal would effectively do away with protections for people with preexisting medical conditions and would remove the ACA’s requirements that all health plans offer minimum essential benefits, such as hospitalization, maternity care and mental health services.
Graham-Cassidy would have eliminated the Medicaid expansion and funneled money away from states that covered their poorest residents via Medicaid, such as California, and toward those that didn’t bother, such as Texas, via a block-grant system providing each state with a capped amount of federal funding.
The new proposal is vague on how its block-grant system would work, but on the surface it has some of the same features as Graham-Cassidy. As Duke University health insurance expert David Anderson puts it, the message for Americans saddled with a healthcare law like this is: “Don’t get sick.”
The new proposal, which will be the subject of a press conference by the sponsors Wednesday, came out as the Trump administration issued final regulations for its expansion of Association Health Plans as alternatives to ACA health coverage.
The association plans, which are aimed at loose conglomerations of workers or small businesses, would be subject to many of the same rules as large-group plans offered by corporate employers. Their sponsors, however, wouldn’t have the same incentives as big businesses to offer employees truly competitive coverage.
The association plans would be exempt from many ACA rules requiring coverage of essential benefits or guaranteeing coverage of preexisting conditions and from ACA standards applying to the share of premiums devoted to medical services. Because they may be cheaper than ACA plans — largely because they offer skimpier coverage — expectations are that they could siphon as many as 4.4 million customers out of ACA health plans. That would leave the latter covering a sicker and older population, which would face higher premiums as a result.
Association plans also come into the marketplace with a nasty reputation. As Kevin Lucia and Sabrina Corlette of the Commonwealth Fund observed last year, scam artists “have long used AHPs as a vehicle to sell fraudulent coverage to hundreds of thousands of unsuspecting consumers.”
John Warner, president of the American Heart Assn., underscored AHPs’ “long history of fraud and insolvency targeting small employers and individuals,” in a comment on the administration proposal submitted in March. “Many plans collected premiums for health insurance coverage that did not exist. Some plans did not pay medical claims. … For consumers and patients, the results were disastrous.”
Like the association rules, the Health Policy Consensus Group’s proposal bristles with free-market and anti-ACA catchphrases. It claims to be all about “more choices” to “empower consumers.” It boasts of its “consumer-centric approach” via the elimination of “heavy federal mandates.” (In the right-wing lexicon, government regulations are never less than “heavy.”)
The proposal, however, would eliminate ACA mandates that protect consumers’ rights to health coverage regardless of their medical condition or history and ensure that the coverage they’re buying is worth the money. It also embodies the cherished GOP and conservative ideal of shrinking women’s reproductive health rights: The block grants to be offered states instead of premium subsidies and funding for Medicaid expansion would be unavailable to pay for abortions.
In states receiving the federal block grants, the proposal says further: “Obamacare requirements on essential health benefits, single risk pools, minimum loss ratio requirements, and the 3:1 age ratio would not apply.”
Translated from the bureaucratese, that means the repeal of regulations that require maternity care, prescriptions, hospitalization and substance abuse treatment; that limit the profits that health insurers can squeeze out of your premiums and mandate a certain level of spending on medical care; and that protect older patients from being priced out of the marketplace. The coalition asserts this would bring “new flexibility” for states to fashion their own regulations, but it doesn’t say that the cost of this flexibility would fall chiefly on older, sicker and injured customers.
The Consensus Group would expand health savings accounts, a tax-advantaged healthcare financing scheme that already is geared heavily toward more affluent Americans. HSAs are beloved by health insurance companies, some of which have set up their own banks to collect account contributions and dole them out — often after the subtraction of sizable customer fees.
As for the block-grant system, which would replace the ACA’s system of subsidies for premiums and out-of-pocket expenses, like all block grants to states, it would mask a systematic reduction in federal funding — again at the expense of the ordinary American in the health insurance market.