Thursday, October 17, 2019

The devil is in the details of Senate health bill’s waivers

The Senate health bill may appear to keep most benefits for people in the Marketplace. But look at the broad rights states have to waive coverage rules.

Although people using Medicaid will suffer gravely from the Senate’s healthcare bill, many folks who buy private insurance through the Marketplace will also be hit hard. Not just by lower subsidies or by higher premiums. But by the sneaky way the bill uses waivers to let states change coverage pretty much any way they want.

Waivers aren’t new. The Affordable Care Act (ACA) already gives states broad flexibility to waive key provisions so long as health coverage isn’t jeopardized and federal deficits aren’t increased. States can seek waivers to change premium tax credits, individual and employer mandates, caps on annual out-of-pocket spending, even the definition of essential benefits and the requirement to run a Marketplace at all.                                                          

The Senate bill, however, slyly gives states extraordinary freedom to waive coverage-related protections. That autonomy is likely to result in substantially reduced benefits and increased premiums.

For instance, under the ACA, all insurance plans must provide ten Essential Health Benefits (EHBs). These include prescription drugs, hospitalization, maternity care, mental health care, substance abuse treatment, and preventive services like birth control. Even if a state seeks to redefine these benefits, plans must still include them. What’s more, insurers cannot reduce their costs by capping how much they’ll pay a person per year or lifetime.

That all changes under the Senate bill, where states can waive both EHBs and spending limits. Thus, people who need the services states opt out of—e.g., maternity care—can lose the possibility of coverage altogether. And people with high health costs, such as cancer victims and chronic-disease sufferers, could permanently lose their benefits during treatment.

The Senate bill also shrewdly lets states waive rules that protect people with pre-existing conditions. Currently, the ACA requires plans to offer the same premiums to everyone regardless of health status. The Senate bill keeps that requirement. But it also removes the individual mandate that puts young and healthy people into the mix and helps offset insurers’ costs. Thus, insurers would need to limit services that attract sicker enrollees.

As a result, says the Brookings Institute, it’s likely that no one in a state that waived EHBs would have access to comprehensive coverage. Instead, insurers would create healthcare-lite packages and sell separate and expensive supplemental policies for the benefits the packages don’t cover. In that way, insurers could effectively deny coverage to people with pre-existing conditions by charging rates so high that those folks get priced out of the market entirely.

That would never happen, you say? To the contrary. In fact, the Republican bill so loosens the ACA’s conditions for approving waiver requests that almost all would be granted. Specifically, the Senate’s bill dictates that a state’s waiver request must be approved as long as it doesn’t increase the federal deficit. Period. There is no requirement for waivers to also protect health benefits.

And if that’s not scary enough, the changes states make via waivers can’t be repealed by new administrations for eight years. (The ACA limit is five.)

Moreover, states would no longer have to pass laws in order to change the federal law’s requirements. An insurance company would need only a certificate from a state’s governor or insurance commissioner, and off the company could go.

It would take a book to cover all the injustices, dangers, and cruelties of the Senate’s unhealthy healthcare bill. The American Medical Association wrote to Mitch McConnell to say the current proposal violates the Hippocratic oath taken by all doctors to “first, do no harm.” And if Donald Trump called the House bill “mean,” what word applies to the Senate version? Machiavellian doesn’t even come close.

As Brookings concludes, there are good reasons for waivers that creatively address a state’s particular needs. “But there is no case for loosening waiver authority so much that states can use federal taxpayers’ money to subvert the goals of health reform.”

Related: “Senate health bill waits at the crossroads”