White House Chief of Staff Reince Priebus tried to reassure America over the weekend that the most horrific provisions of the Republican Obamacare repeal bill were so horrific that no politicians in their right mind would even contemplate implementing them.
The issue is protection for people with preexisting medical conditions. Under the Affordable Care Act, insurers aren't allowed to charge those customers more for coverage just because of their health profile. The repeal bill passed by House Republicans last week allows states to obtain waivers to cut that safeguard way back, potentially allowing insurers to charge sky-high surcharges to make coverage unaffordable for those patients.
"Even if a governor — which I'm not sure that's ever going to happen — takes the waiver option," Priebus told Chris Wallace on "Fox News Sunday," "it's not going to affect anyone with continuous coverage."
Mr. Priebus, meet Republican Govs. Scott Walker of Wisconsin and Dennis Daugaard of South Dakota.
At a public event in Milwaukee on Friday, Walker said of the waiver: "That's something we certainly would consider. It depends on the conditions, and again, what's in the House bill could be very different than what's in the Senate bill and what finally comes to the president. So I'm going to wait till I see what's in the final version."
Following a daylong uproar, Walker walked back his statement. "I'm waiting to see what gets to the president's desk, but we're not looking to change preexisting conditions," he told the Milwaukee Journal-Sentinel. He also posted on Twitter that "it is a given" that the state will "ensure coverage for people with preexisting conditions."
Daugaard hasn't walked back his statement. On Monday, according to the Sioux Falls Argus Leader, he said he would consider seeking the waiver if it's passed into law. "I think most citizens are probably not conscious of the cost so a responsible government has to weigh both sides," he said. "We want to give as much benefit, particularly in health, as you can afford, but you have to be able to afford it."
This is how the Republican bill, the American Health Care Act, has threatened to undermine what previously was the line-in-the-sand even for GOP politicians—the loss of protection for those with pre-existing conditions. That's despite promises by Priebus, House Speaker Paul Ryan, R-Wisc., other leaders of the House GOP caucus, and President Trump have insisted since the repeal bill's passage that it would do nothing to expose Americans to the threat of being rejected for coverage or surcharged because of their medical histories. They're now shown to be wrong, deceitful, or both.
The measure has been sent to the Senate, where Republican leaders say it will be subjected to wholesale revision.
These developments also illustrate the folly of passing legislation based on the expectation that its most pernicious provisions are so harmful no one would dare put them into practice. This is the stop-me-before-I-shoot-myself approach that produced the sequester — a package of automatic spending cuts so economically unpalatable that Congress figured it would be an effective spur to budget negotiations in 2011. It didn't work, and the cuts went into effect in 2013, to the economy's lasting disadvantage.
The notion that governors would universally avoid healthcare policies that harm their residents is belied by the record. Numerous states with conservative administrations deprived their poorest citizens of the benefits of health insurance by refusing to expand Medicaid, even though the federal government picks up more than 90% of the tab. Many of those same states impose stringent eligibility limits on traditional Medicaid. In Florida, eligibility for parents stops above an annual income of $6,738 for a three-person family. In Alabama and Texas, Medicaid eligibility stops at annual household income of $3,676.
There's no question that the repeal bill drastically undermines the ACA's ban on medical underwriting — the pre-ACA process in which insurers could reject applicants for coverage or impose stratospheric premium surcharges based on their medical history. In that era, insurers compiled lengthy rosters of conditions warranting rejection or surcharging, such as this 25-page list distributed by Blue Shield of California to sales agents in 2011. The ACA only allows modestly higher premiums to be charged to smokers.
The repeal bill, however, allows states to seek a waiver of the ban on medical underwriting and allow insurers to charge more for applicants who allowed their coverage to lapse for 63 days or more. States also could eliminate or reduce the ACA's list of "essential benefits," which would erode requirements that insurance plans cover pregnancy and maternity benefits, mental health treatment, even hospital stays.
Republicans say the continuous coverage requirement would act as a strong incentive for people to remain insured. But for many households, that's easier said than done. Experts have estimated that almost one third of people with preexisting conditions suffer a gap in coverage over any because of economic pressures, such as a job loss. The Commonwealth Fund has calculated that in 2016, some 30 million Americans experienced a coverage lapse of more than three months. Under the repeal bill, they could lose protection for any preexisting conditions.
The repeal bill ostensibly would require states seeking waivers to show they had an alternative plan to cover residents with medical conditions, typically a high-risk pool to ensure they can obtain treatment. As we have reported, high-risk pools are a thin reed to rely on. Before the ACA, they were offered in 35 states. Almost universally they failed, because a lack of adequate funding led to long waiting lists or time limits for patients in need and unaffordable premiums for those in the pool.
Among the failures was Wisconsin's high-risk pool, which is being touted by Walker and House Speak Paul Ryan (R-Wisc.) as a success. "We had a very effective program before," Walker said Friday.
Yet the Wisconsin pool had many of the flaws of the other states'. At its peak it covered 21,000 people. But of Wisconsin's half-million residents without coverage, many had preexisting conditions and couldn't afford the pool's premiums, which ranged as high as $847 a month for a 60-year-old male. Applicants had to endure a six-month waiting period without coverage and benefits were capped at $2 million. The pool, which was largely funded from assessments on insurers and premiums from enrollees, lost $24.2 million in 2010 and 2011, before a $6-million federal grant.