Senate bill would allow insurers to sell bare bones plans to one segment of the population while offering healthier sector a lower premium rate.

Senate revises healthcare bill, keeps Cruz amendment for 'skinny' coverage

By Susan Morse
02:27 PM
GOP healthcare bill

The Senate health bill unveiled Thursday keeps a controversial amendment put forward by Senators Ted Cruz and Mike Lee to allow insurers to sell bare-bones plans to one segment of the population while offering coverage to the healthier sector at lower premium rates.

Provider and payer organizations that have weighed in on the amendment are against it, saying Cruz's proposal would result in higher premiums for people with serious and chronic conditions.

This is because the amendment allows younger and healthier members to purchase non-ACA compliant plans that have lower premiums but fewer benefits.

Those with chronic or pre-existing conditions would purchase ACA-compliant plans that keep essential benefits. Insurers would be prohibited from setting premiums based on health status. Opponents said premiums would have to rise for all beneficiaries.

The bill would establish a federally funded high-risk pool in states to help offset the expense of coverage of higher-risk enrollees.

"This same kind of risk pool segmentation occurred prior to enactment of the ACA when 35 states operated high-risk pools for persons unable to obtain insurance on the private market," said the July 12 letter to Senators from 13 groups including AARP and the American Cancer Society. "In that experience, most of those states could not provide sustained funding support and were forced to limit enrollment, reduce benefits, create waiting lists, and raise premiums and out-of-pocket costs to the point of unaffordability."

Insurers have also voiced their opposition in letters to Cruz.

America's Health Insurance Plans said products governed by different rules and stands would further destabilize the individual market and increase costs for those with pre-existing conditions, according to the document obtained by The Washington Post.

Scott P. Serota, the president and chief executive of the Blue Cross Blue Shield Association also said the Cruz plan could make coverage unaffordable for people with pre-existing conditions.

Cost-sharing subsidies, of critical importance for insurers looking to remain in the exchange market, still disappear in two years under the revised Senate bill. The federally-funded CSRs allow insurers to give lower income beneficiaries a break in the cost of deductibles and out-of-pocket expenses.

The Senate bill revises a House bill released in May, but retains many of its provisions.

It keeps deep cuts to Medicaid, turning the federal entitlement program to state control that is federally funded. The funds would be capped per state based on the number of Medicaid beneficiaries.

Planned Parenthood would be banned from the Medicaid program for one year.

Also eliminated is Medicaid expansion starting in 2021, which was adopted by 31 states and the District of Columbia.

Providers have credited the ACA's Medicaid expansion with helping to lower the amount of uncompensated cost of care.

On its website, the American Hospital Association asks members to click to tell senators they oppose the Better Care Reconciliation Act.

Former Centers for Medicare and Medicaid Services Acting Administrator Andy Slavitt tweeted, "The Senate Trumpcare bill amendment was just released & it went from very bad to unworkably bad. First analysis."

The revised bill retains some of the Affordable Care Act taxes on the wealthy to pay for provisions.

The legislation retains a 3.8 percent tax on net investment income for individuals earning more than $200,000 and couples earning more than $250,000; and an 0.9 percent surtax for the Medicare insurance program for the elderly on people with those incomes, according to Reuters.

Under the Senate bill, insurance subsidies based on income would be scaled back to 350 percent of the federal poverty level, according to Politico.

The revised Senate bill gives $45 billion for opioid funding as opposed to the $2 billion in the original bill, Politico reported.

It keeps a tax break for health insurance executives.

It would allow consumers to receive tax credits to purchase catastrophic health plan coverage and would also allow people to use health savings accounts to pay for premiums.

The individual and employer mandates to buy insurance goes away, but individuals who drop their coverage would be unable to purchase new coverage for six months.

The Senate is expected to vote on the bill next week after the Congressional Budget Office scores the financial and coverage impacts of the bill.

Senate Majority Leader Mitch McConnell can afford to lose only two votes. Last month at least 10 Senators opposed an earlier version of the bill.

The CBO estimated the earlier Senate bill would leave 22 million more people uninsured over a decade compared to the ACA. This bill never made it to a vote but was scrapped before the July 4 recess.

Twitter: @SusanJMorse