The new and improved Republican healthcare bill adds an amendment to the American Health Care Act (AHCA) bill put forward in March, which did not make it to a vote due to insufficient support. If you would like a refresher on what the AHCA entailed, see the post from March 8th or search AHCA.
Due to this amendment, States would be allowed to waive the essential health benefits rules within the ACA (aka Obamacare) one of which requires insurance companies to cover individuals with pre-existing conditions. So this means that if a State so chose, people with pre-existing conditions who do not receive insurance from their employer/spouse’s employer would be at the mercy of the insurance company in terms of having access to insurance and since insurance companies are for profit institutions, either no policies or exceptionally high premium policies would be offered to those with a pre-existing condition (http://www.npr.org/2017/05/01/526436036/president-trump-promotes-revised-version-of-gop-health-care-bill; http://www.latimes.com/politics/la-na-pol-obamacare-101-preexisting-conditions-20170502-htmlstory.html).
If a State chose to waive the essential health benefits rules then the State would need to provide some type of subsidized high risk insurance program/plan – and this is part of what Speaker Ryan in referencing when he states that there are, “’layers’ of protection for the sick in the bill” (http://thehill.com/policy/healthcare/331632-gop-bill-hung-up-on-pre-existing-conditions). However, “the law would impose no adequacy test on these programs. Before Obamacare, many states offered high-risk pools, which were intended to provide subsidized insurance to high-cost patients who insurers would otherwise be unwilling to cover at an affordable price. The problem was, covering these patients is very expensive, and public funding to subsidize the pools routinely proved to be insufficient to cover the number of people who needed such coverage. As a result, pools often featured very high pricing (unaffordable to many would-be participants) and waiting lists to participate. The Republican plan would likely lead to the return of this dysfunction” (https://finance.yahoo.com/news/no-republican-healthcare-bill-does-222356142.html).
Another “layer” that Speaker Ryan is referencing is that the AHCA requires that if someone has a pre-existing condition, is currently on insurance and never has a lapse in coverage then that person cannot be terminated from her/his insurance plan due to her/his pre-existing condition. However if someone has a lapse in insurance then future insurance companies can deny that person coverage or charge that person high rates. Since most people experience lapses in insurance coverage at various times in life – due to job changes, financial stressors, etc… this is not actually a true “layer” of protection.
In addition, states “could get rid of the ban on charging higher premiums to people with pre-existing conditions… House Speaker Paul Ryan said… that this would all give states greater flexibility, that a cookie-cutter, one-size-fits-all health system doesn’t work for America” (http://www.npr.org/2017/04/27/525918227/new-health-care-bill-needs-moderate-republicans-support-what-do-they-want). What exactly is cookie-cutter about ensuring that all Americans can access affordable insurance regardless of his or her body’s well-being is not exactly clear, but it is indeed a good sound bite and rallying cry. Another privilege insurance companies would receive from this amendment to the AHCA is that they would also be allowed to offer fewer benefits i.e. cover fewer medicines, procedures, etc… (http://www.npr.org/2017/05/01/526436036/president-trump-promotes-revised-version-of-gop-health-care-bill).
A final aspect of the AHCA amendment is that it would get rid of what is called community rating – community rating is the system by which insurance companies determine premium prices using a person’s age and geographical location. Terminating community rating would return the insurance industry to setting premium rates based on an individual’s health – both pre-existing conditions and current health, for example one’s body mass index: “A 2013 report from the provider eHealth Insurance found that people with BMIs in the ‘obese’ category paid 22 percent more, on average, than those in the ‘normal” range’ (http://www.motherjones.com/politics/2014/07/why-bmi-big-fat-scam) and “an insurance company has started giving customers another reason to slim down by being one of the first in the nation to offer discounts to customers who keep a low body-mass index (http://www.nbcnews.com/id/17385151/ns/health-fitness/t/shrink-your-bmi-your-insurance-bill/#.WQlaKbhtiiA).
But have no fear, for, “President Trump is promising great things from this health care bill. He said it would lower premiums, increase competition and protect people with preexisting conditions beautifully, as he put it” (http://www.npr.org/2017/05/01/526436036/president-trump-promotes-revised-version-of-gop-health-care-bill).