Cramer Gets Three Pinocchios for Health Care Claim on Pre-Existing Conditions

Washington Post: Would the House GOP plan have prevented ‘price discrimination’ against people with preexisting conditions?
By Glenn Kessler
September 19, 2018

Key Points:

  • [W]e are going to examine Cramer’s statement that the American Health Care Act (AHCA), passed in the House, had safeguards that prevented price discrimination as a result of preexisting conditions. (The bill never advanced in the Senate.) Cramer serves on the House Energy and Commerce Committee and has said, “I have read the 200-page bill in its entirety and debated nearly every section of it during a 27-hour hearing.” So he certainly should understand the nuances.
  • Before Obamacare, insurance companies could consider a person’s health status when determining premiums, sometimes making coverage unaffordable or even unavailable if a person was sick with a problem that required expensive treatment. The ACA prohibited that, in part by requiring everyone to purchase insurance, in what was known as the individual mandate.
  • The waiver system designed under the AHCA was criticized by health-care experts. The nonpartisan Congressional Budget Office sketched a scenario that described unraveling insurance markets and spiraling health-care premiums if the AHCA had become law.
  • Matthew Fielder of the Brookings Institution, who had been chief economist of the Council of Economic Advisers under Obama, said that under the MacArthur Amendment, he believed the higher premiums would extend even to people without coverage gaps. That’s because healthy people would have an incentive to drop out of community-written pools and just buy insurance based on their health status, as premiums would be lower. Thus the community pools would be filled with increasingly sicker people facing increasingly higher premiums.
  • The CBO, in its report, said that states that took advantage of these provisions could perversely end up blowing up their insurance markets, leaving spiraling costs for people with preexisting conditions, even as average premiums might end up lower.
  • Eventually, the CBO said, community-rated “premiums would be so high in some areas that the plans would have no enrollment. Such a market would be similar to the nongroup market before the enactment of the ACA, in which premiums were underwritten and plans often included high deductibles and limits on insurers’ payments and people with high expected medical costs were often unable to obtain coverage.”
  • The CBO was highly skeptical that the GOP legislation provided enough funding for states to offer assistance to people who could not afford insurance. “The funding would not be sufficient to substantially reduce the large increases in premiums for high-cost enrollees,” the agency said, so over time, less-healthy people “would be unable to purchase comprehensive coverage with premiums close to those under current law and might not be able to purchase coverage at all.”
  • [The GOP’s pledge on preexisting conditions] may look great on paper, but the reality is that it is not a sustainable pledge.
  • Thus Cramer goes too far to claim that in the AHCA, there are “safeguards to make sure that there’s not price discrimination as a result of preexisting conditions.” […] He earns Three Pinocchios.

Read the full article here.

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