As Uninsurance Rate Increases, Republicans Seek To Roll Back Health Law’s Consumer Protections

Despite new Census data showing that a growing number of Americans are losing their private health insurance coverage and becoming uninsured, Republicans are expected to introduce legislation at this morning’s hearing of the Energy and Commerce Health Subcommittee that would prevent insurance plans in existence before the Affordable Care Act from making drastic benefit cuts or other policy changes, effectively gutting consumer protections for millions of Americans with private coverage. The panel will also consider H.R. 2077, a bill to repeal medical loss ratio (MLR) regulations that require plans that don’t spend 80 to 85 percent of premium dollars on health care costs to issue rebates to their enrollees.

The health law exempts health plans in existence before the law went into effect from its benefits standards and consumer protections — so long as employers or individual policies don’t significantly change their benefits or increase costs. Republicans argue that employers would eventually lose this protection and “face steep penalties, increasing their costs and negatively affecting wages and job growth” and so they’ve offered a bill that would completely eliminate the trigger for grandfather status. Employers or individual policies would be able to skirt the new consumer protections in the Affordable Care Act while significantly shrinking benefits package or increasing deductibles.

The GOP measure would prohibit the enforcement forever into the future of any requirement or regulation related to existing health policies. Plans that existed before March 23, 2010 would never have to offer the following consumer protections:

— Extend dependent coverage to young adults up to age 26

— Stop denying coverage for pre-existing conditions

— Stop setting lifetime limits for policies

— End annual limits (restricted limits now, all annual limits in 2014)

— End rescissions of coverage

— Abide by the medical loss ratio provision — spending 80 to 85 percent of premium dollars on health care.

The Obama administration has sought to work with employers and plans to keep disruptions to a minimum. For instance, the Department of Health and Human Services loosened the grandfather regulations on Nov. 15, 2010, updating the rules to allow more employers and policies to keep their grandfather status. But unlike the GOP, Democrats wouldn’t want plans to be exempt forever — and that’s a good thing. The whole point of grandfather rules is to serve as a bridge to gradually move everyone into plans that are required to meet a basic floor of standards, ensuring that everyone will eventually have access to the law’s new consumer protections.


The GOP’s bill to undermine the MLR regulations would similarly deny benefits to beneficiaries. The Obama administration estimates that as many as 9 million people will qualify for rebates totaling between $600 million and $1.4 billion in 2011, and between $2 billion and $4.9 billion for 2011–2013. In fact, a recent Government Accountability Office (GAO) survey concluded that insurers are already “considering reducing premiums in 2012 partly in response to the PPACA MLR requirements.” State insurance regulators told the GAO that some companies “have not applied for premium increases and are making adjustments to lower premiums as a strategy to increase their MLRs.”