As legislators await the results of a Congressional Budget Office report Monday analyzing the cost and effects of the proposed American Health Care Act, a new report shows that the $128 billion set aside in the bill for high-risk pools is not enough.
The bill needs at least $359 billion in federal funds over ten years, and at most $656 billion, according to the report by the Urban Institute that was funded by the Robert Wood Johnson Foundation.
This is based on the assumption that all 50 states would choose to get waivers on the coverage of pre-existing conditions for individuals buying plans in the marketplace.
Currently, under the Affordable Care Act, no person can be denied coverage for a pre-existing condition. The same is true under the Republican American Health Care Act.
But in a last-minute amendment proposed by Rep. Tom MacArthur, a Republican from New Jersey, a state can get permission for an insurer to charge patients more if their coverage lapses for more than 63 days. This results in insurers going back to the days before the ACA, and charging people with pre-existing more, because high-risk coverage would be expected to cost more.
To help these consumers afford the higher price of premiums, states that get waivers would set up high-risk pools, funded by the federal government, to pay insurers and offset some of the cost to consumers.
The AHCA has close to $130 billion earmarked over nine years for the high-risk pools. An amendment to the bill added another $8 billion.
Between 2.5 to 7.6 million people could be eligible to receive the high-risk pool funds, depending on the level of coverage and household subsidies, according to the report.
The least expensive high-risk pool option would cost the government $359 billion over 10 years if all states set them up. This model limits eligibility to those who would experience high claims under standardized coverage, about 2.5 million people.
An estimated 6.2 million high-risk consumers would remain uninsured under the AHCA in this model.
The most costly option in the report would cost $656 billion over 10 years. This model is based on more traditional high-risk pools and adds those with a specified set of chronic conditions for broader eligibility of an estimated 7.6 million consumers.
"Traditional high-risk pools are symptoms of poorly regulated and inadequately subsidized insurance markets," said Katherine Hempstead, senior adviser at the Robert Wood Johnson Foundation. "To properly finance them is extremely expensive, which is why they tend to be underfunded, resulting in inadequate access to coverage for those who need health care the most."