Ten Republican senators introduced new legislation on Thursday that aims to protect people with pre-existing conditions should an anti-Obamacare lawsuit succeeded in court. But a closer look reveals that the bill doesn’t completely safeguard people’s coverage as current health law does. Instead, it’s likely an attempt to fend off criticism ahead of the midterm elections.
The new legislation was introduced just two weeks before court hearings begin on the case of Texas v. United States, which will determine whether Obamacare is constitutional or not.
A lawsuit filed by 20 Republican-controlled states argues that the Affordable Care Act (ACA) is now unconstitutional, ever since Congress repealed the law’s individual mandate — or tax penalty for people who don’t have health insurance — last year. Their argument is that without a financial penalty, the individual mandate is unconstitutional, and as a result, so is the rest of the health law.
Should a federal judge accept the argument, major parts of the ACA would be eviscerated — including the popular protections for people with pre-existing conditions. The Trump administration’s Justice Department has already made clear that it will not defend the law’s coverage of pre-existing conditions in court.
Democrats and national groups are using this lawsuit against Republicans in their campaigns and advertisements ahead of the November elections. That’s because the ACA is pretty popular, and especially these pre-existing condition protections. In fact, two-thirds (65 percent) of voters say a candidate’s support for these provisions is either the “single most important factor” or “very important” to their vote.
So it’s not surprising that 10 GOP senators — Sens. Thom Tillis (NC), Lamar Alexander (TN), Chuck Grassley (IA), Joni Ernst (IA), Lisa Murkowski (AK), Bill Cassidy (LA), Roger Wicker (MS), Lindsey Graham (SC), Dean Heller (NV), and John Barrasso (WY) — introduced a bill so they can say they’re trying to defend people with pre-existing conditions. (Heller is in a particularly competitive race this year.)
“This legislation is a common-sense solution that guarantees Americans with preexisting conditions will have health care coverage, regardless of how our judicial system rules on the future of Obamacare,” said Tillis in a statement.
The legislation reads similar to GOP health bills that tried to repeal and replace the ACA last summer. This isn’t too surprising as three drafters of one repeal bill — Cassidy, Graham, and Heller — all co-sponsored this one. And like those bills, this new one falls short of actually protecting people with pre-existing conditions.
The bill really only fully addresses one ACA protection: guaranteed issue, which means an insurance company needs to sell coverage to any person who wants to buy it.
But it’s lacking another key protection: community rating, which means every customer who buys similar insurance should pay similar prices. Should the ACA be repealed or deemed unconstitutional, and even if this bill is passed, premiums could be marked up based on age, gender, occupation, or other activities. And insurers could exclude covered benefits for people with pre-existing conditions.
“Really this just prevents insurance companies from saying ‘no you can’t buy this coverage’ but this allows the opportunity to say no through price or through benefits,” said Chris Sloan, senior manager at director at Avalere Health.
“You can make a product so expensive based on medical history, based on gender, based on age, or based on not covering something that someone needs that they can’t afford — then you’ve effectively discriminated against them,” he added.
“An insurer would have to cover drugs, for example. But, it could exclude any drugs to treat a pre-existing condition. Same for hospitals, physicians, etc. This is how it worked before the ACA and in short-term plans,” said Larry Levitt, of the Kaiser Family Foundation, on Twitter. (Short-term health plans are the Trump administration’s Obamacare fix, but in reality they’re skimpy health plans that are unusable for people with pre-existing conditions.)
Here's an example of a pre-existing condition exclusion, which would be permitted under the new Republican bill. pic.twitter.com/klX7pgynH4
— Larry Levitt (@larry_levitt) August 24, 2018
Pre-existing condition protections affect everyone, whether they get health care through work or purchase it themselves, which is probably why there’s a lot of attention on this issue. Disrupting these rules also really disrupts the Obamacare marketplaces, where every consumer protection affects every insurer regulation.
“If a lawsuit succeeds and gets rid of the prohibition on pre-existing condition rating or exclusions for pre-existing conditions then it kind of falls apart because it’s no longer you have to accept everyone. Now plans can make their own rules and then there becomes questions about how the subsidies fall along with that,” said Sloan.
“I think we’re somewhat underestimating the challenge of taking out some of the core parts of the ACA and leaving some parts behind,” Sloan said.