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June 2012
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STRIPPED House health measure axes popular features


Nancy Pelosi, long the leader of House Democrats, has been pilloried for her famously fumbled remark regarding Obamacare: "We have to pass (the Affordable Care Act) so that you can find out what is in it."

Perhaps now it is Republican House Speaker Paul Ryan's turn. He could aptly say, "We had to pass (the American Health Care Act) so you could find out what's not in it."

The AHCA is the Republican "replacement" proposal for the ACA. The GOP program has more letters, but less stuff. Specifically an article last week in the Wall Street Journal says an eleventh-hour amendment to the House bill guts a number of popular protections required by Obamacare in employer-sponsored insurance plans.

As with all things governmental, the mechanics are convoluted. But the GOP plan creates a mechanism for employers to jettison coverage required by Obamacare for such services as prescription drugs, hospitalization, mental health treatment and maternity care. It also allows employers to do away with features that cap employee out-of-pocket expenses resulting from catastrophic illnesses.

The mechanism for this, says the WSJ, is the AHCA's provision allowing states to obtain waivers from current Obamacare coverage requirements. The newspaper says such waivers, once granted, would arm all employers with a means to reduce coverage to the lowest common denominator under a heretofore innocuous provision of the current law.

Specifically, Obamacare has a presently meaningless provision saying employers are not bound by the coverage requirements of the state where they do business; they are free to pick from another state's list of required benefits. This has no effect today because the minimum requirements are the same for all states under Obamacare.

But once states begin receiving waivers, the aforementioned provision takes on an entire new meaning. If the Republican measure becomes law, employers would be free to choose from the minimum coverage requirements of any state in the union and adjust their program in accordance with that.

Obamacare forbids employer-sponsored policies from placing annual limits on the amount of care they will pay for. It also bans lifetime payment limits for 10 "essential" health care expenses such as prescription drugs. But if states receive waivers to ditch those requirements under the Republican plan, the protections effectively evaporate.

All of this is done in the GOP bill in the name of reducing coverage costs by lessening employers' claims exposure. Prior to Obamacare roughly 60 percent of employer-sponsored policies limited lifetime payouts. It is safe to assume many would return to this practice if permitted to do so. That's significant because employer-sponsored plans are the single biggest piece of the U.S. health insurance market. They cover 159 million Americans.

The features put at risk by the House plan are popular. Republicans will not be easily forgiven if the measure becomes law and they go away.

Our bet is the bill won't become law however, which is fine with us. As regular readers already know, our view is that Republicans should steer clear of this whole mess and let Obamacare die a natural death. We continue to consider that good counsel.

Comments made about this article - 1 Total

Jeremy Engdahl-Johnson posted on: Monday, May 15, 2017 9:41 PM

Title: Small employers

Executive order raises big questions for ACA markets, Medicaid and small employers. Milliman provides this perspective: https://www.healthcaretownhall.com/?p=8404#sthash.hZxlcugA.dpbs

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