Insurers are speaking out against the use of high risk pools in the new healthcare bill and also its plan to lower premiums for healthier individuals by segmenting the population into two different insurance markets.
This would result in higher premiums and unaffordable coverage, said the heads of America's Health Insurance Plans and the BlueCross BlueShield Association, in a July 14 letter to Senate Majority Leader Mitch McConnell and Democratic Leader Charles Schumer.
With the amendment, the law to replace the Affordable Care Act would allow plans to refuse coverage, charge different rates, or not offer comprehensive benefits based on age and gender, the letter said.
Risk adjustment is also critical to making the individual market sustainable, but can only work when there are uniform benefit requirements across the market, they said.
"It is simply unworkable in any form and would undermine protections for those with pre-existing medical conditions, increase premiums and lead to widespread terminations of coverage for people currently enrolled in the individual market," said Marilyn Tavenner, AHIP CEO and president, and Scott Serota, president and CEO of the Blue Cross Blue Shield Association.
Senator Ted Cruz put forward the "Consumer Freedom Option" in the bill for healthy consumers to have a less expensive option for coverage. Insurers would be able to sell them a product that didn't comply with Affordable Care Act minimums for coverage, as long as they also offered a plan for consumers who did want or need more comprehensive coverage.
McConnell over the weekend put the Senate bill on hold until Senator John McCain recovers from surgery in his home state of Arizona and is back in Washington to vote on the bill. Republicans need every vote, as two members in their 52-seat majority have said they won't vote for the bill.
"While John is recovering, the Senate will continue to work on legislative items and nominations, and will defer consideration of the Better Care Act," McConnell said by statement.
The Better Care Act with Cruz's amendment would allow insurers to cherry pick healthy consumers, making coverage unaffordable for the millions who want or need comprehensive coverage, the insurance groups said.
A federally-funded high risk pool would not be enough to address the cost of plans that cover people with pre-existing medical conditions, they said.
"As healthy people move to the less-regulated plans, those with significant medical needs will have no choice but to stay in the comprehensive plans, and premiums will skyrocket for people with preexisting conditions," Tavenner and Serota said. "This would especially impact middle-income families that that are not eligible for a tax credit."
Taxpayers would pay more to finance federal tax credits for the individuals in comprehensive plans and these costs would
continue to increase, even with dedicated funding.
Finally, they said, the provision would lead to fewer coverage options for consumers who purchase plans in the individual market. As a result, millions of more individuals will become uninsured.