Ted Cruz Wants To Split Insurance Markets. He Should Look At Tennessee

Evrard Martin
Juillet 17, 2017

That might not sound like much, but it has the potential to drive down premiums and re-shape individual health insurance markets across the country, which right now are collapsing under the weight of Obamacare regulations and rising premiums.

With Republicans holding only a two-vote Senate majority, McConnell needs revisions to win support from several conservatives and moderates who opposed the original draft of the bill unveiled two weeks ago.

Released yesterday, the new Senate healthcare plan-modified by Sen.

Insurers in the Affordable Care Act, or "Obamacare", marketplaces earned an average of almost $300 per member in the first quarter of 2017, more than double what they earned in a similar period in the marketplaces' previous three years, The Washington Post reported.

But critics including the insurance industry say it would split the sick and the healthy, leading to unsustainably high premiums for people with medical problems and pre-existing conditions, who may get priced out of the market unless taxpayers bail them out. "This includes consumer outreach, a function that is hugely important to insurers - if the Trump administration decides not to allocate resources toward outreach for the next enrollment period, insurers might reasonably expect that the people who do sign up will be sicker, on average". Ted Cruz, R-Texas, is expected to allow insurers selling individual plans that comply with Obamacare rules to also sell "noncompliant" plans in the same states.

Even if the exchanges were collapsing into a death spiral, it would not justify their plans to slash Medicaid, a program that does not require actuarial balance and is not even theoretically susceptible to a death spiral. In trying to decipher the real impact of the health care plan from the Senate, it looks like the bill cuts taxes for the wealthy and corporations and pays for it by cutting provisions that help millions of people afford health coverage and care.

Representative Tom Price, secretary of Health and Human Services.

But, you might ask, without "penalties", who will step in to "subsidize" the cost of high-risk patients whose plan costs are capped?

Grassley said he's "pessimistic" Republicans could come together behind a health care reform measure, even though he tweeted Saturday that the party would find itself going from the "majority to minority" if they cannot agree on a way to repeal Obamacare. States dole out the rest, with some of that also likely to end up with insurance companies.

The other would provide comprehensive yet expensive policies. If the BCRA were to become law, a person who applies for coverage in the individual market and who can not show that he or she has had 12 months of continuous coverage (defined as having no breaks in coverage longer than 63 days) would face a six-month waiting period before an ACA-compliant plan would be required to take effect.

Trumpcare 4.0 offers an extra $70 billion to help insurers shoulder these people's costs, for a total of $182 billion over 10 years. This could lead to more people with low healthcare costs giving up their coverage. This was meant to keep healthy people in the insurance market by allowing insurers to charge people 30 percent on top of the premium if they let their coverage lapse.

Capito, in an interview Tuesday, and Grassley in a call with reporters Wednesday, said Cruz's idea would make insurance unaffordable for people with pre-existing conditions. Without it, the enterprise of passing a health care bill would nearly be worthless. They could offer skimpier policies that don't offer maternity, mental health and prescription drugs. A version of the idea is in the Senate healthcare bill, now in review by the Congressional Budget Office, and it could be the framework for a GOP healthcare compromise. As long as an insurer sold any ACA-compliant plan in a state, his amendment would allow them to also sell pre-ACA plans, too.

Another approach to containing the costs of the regulated pools, Levitt said, would be to transfer money from low-risk pools to high-risk pools.

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