So the GOP’s zombie health care bill is still thrashing around Capitol Hill, trying to eat 22 million+ brains. Senate Majority Leader Mitch McConnell plans to hold a vote on a version of the bill on Tuesday (exactly which version no one – not even GOP leaders – seems to know yet).
However, the media (mainly television media)* seems to have gotten bored of this topic, preferring to move on to 24 straight hours of covering Sean Spicer’s resignation, followed by days of fascinating analysis of his dude-bro replacement. The unfortunate result is that one very important aspect of the GOP “replace” bill has continued to fly completely under the radar: the Cruz amendment.
If the GOP is able to get a “repeal and replace” bill passed (as opposed to going with repeal only), it will be a bill with the Cruz amendment in it. That is the only way the “conservative” wing of the party will sign on. This provision is a backdoor way for them to violate the pledge made by Trump, along with many other members of the party, to retain Obamacare’s protections for preexisting conditions.
Yet because it has gotten so little attention in the media, Republican members of the Senate haven’t had to answer for this at all. Compare this to the vast amounts of attention (deservedly) given to the bill’s Medicaid cuts. The media (and activists!) have done a great job of focusing on these drastic cuts, and as a result, many members of the Senate have had to answer difficult questions about this part of the bill. And ultimately, the Medicaid portion of the bill is the main reason several of them have hesitated to sign on.
So, to remedy this situation, I’m trying to do my teeny tiny part to keep drawing attention to the Cruz amendment. I wrote about it here last week. Today I’m going to repost that entry as a reminder, or for anyone who might have missed it. Also, there’s an update to that post, which is this:
In last week’s post, I wrote about a series of lies Cruz and his allies were telling hesitant colleagues in order to get them on board with the amendment – lies that were meant to hide the true effects of the provision. I finished the post off by telling you about one final deception: when Republicans sent the most recent version of their bill to the CBO to be scored, they left out the Cruz amendment. Oopsie, they said, they just forgot. “And now it’s too late, it’ll take too long to get it back.” But of course, there is no deadline for getting the bill passed, no time limit, other than their own self-imposed time limit. They could have sent the amendment over to the CBO as soon as they’d “remembered,” just days later.
Instead, they decided they would get an “alternative” score of the amendment done by HHS. So the partisan HHS (run by the Trump administration) would score the bill instead of the non partisan CBO. That was where we left off last week. Since then, what do you know, the HHS score has come back and it’s spectacular! It claims the Cruz amendment will cause insurance enrollment to increase by millions and that it will drastically reduce premiums. This is the exact opposite of what every neutral health policy expert and economist thinks will happen.
HHS got these rosy results by making all sorts of faulty assumptions, such as comparing premiums for a 40 year-old under the Cruz plan to premiums for the average of all ages under the ACA (which comes out to approx. age 50). That was just one of many bad assumptions in the analysis that were clearly designed to skew the score toward a favorable result.
This summary from Talking Points Memo explains some of the flaws in the HHS “analysis.” For a more thorough explanation, read this from the Center on Budget and Policy Priorities. And keep in mind, this flawed “score” is what Republicans are now using to convince any wavering Senators that this plan is going to be ggggreat! But as former CMS head Andy Slavitt points out, anyone who takes a closer look at the report will see that the Cruz amendment still makes no sense . . .
And with that, here’s the key portion of last week’s post, explaining what the amendment does and the lies Cruz et al are using to sell it . . . .
What is the Cruz Amendment & Why is it So Harmful?
The Cruz amendment, brain-child of Senator Ted Cruz, says that an insurer can offer “bare-bones” plans that don’t meet Obamacare’s consumer protection requirements as long as the insurer also offers at least one Obamacare-compliant plan in the market as well. The requirements that the Cruz plans would not have to comply with are things such as being required to sell to customers with preexisting conditions, being required to charge customers the same regardless of health status, and being required to cover certain “essential health benefits” (things like maternity care, prescription drugs and emergency room visits).
So this idea might actually sound pretty reasonable at first glance. But once you stop and examine it, you’ll see that it will likely destroy the individual health market. That dreaded “death spiral” Republicans keep claiming (falsely) that Obamacare is in? The Cruz amendment would actually bring it. If this plan goes into effect, young people, healthy people, people who think they’re not going to have any major health care needs will all buy the Cruz plans (or no plan at all). People who actually need health care or feel they’re likely to need it (maybe because they’re older) will buy the Obamacare-compliant plans.
This means the risk pool for the Obamacare-compliant plans won’t be balanced – it will be made up mainly of people with significant health care needs. So those plans will be extraordinarily expensive. As people stop being able to afford them, they’ll drop the insurance (these will most likely be people who are on the healthier end of the spectrum) and the plans will become even more expensive, leading prices to rise even more. This will eventually lead even more people to have to drop out, leading to further price increases, and there’s your death spiral. Health insurance numbers guru Charles Gaba took a stab at figuring out likely premiums (and these prices are for the cheapest – Bronze – plans, which cover less than 60% of medical expenses):
But I’m Pretty Healthy, So Why Should I Care?
And here’s the thing, people may say, “well, that’s fair, the people who use the most care, should pay more.” But, first off, if that’s the philosophy behind this plan, then Republicans should make that argument openly and not hide behind a bunch of false defenses for their plan. But that’s not the argument they’re making for this plan. So let’s cross that off the list. Besides, it’s not just people with major illnesses who will be forced to buy these extremely expensive plans (or go without insurance). The Cruz plans can turn people down if they have preexisting conditions or charge them way more for it (and if you remember what it was like before Obamacare, a preexisting condition can be something as simple as acne or allergies). So anyone who has a minor condition or has ever been sick in the past might not be able to get one of the inexpensive Cruz plans.
On top of that, the Cruz plans will be essentially worthless. Anyone who actually wants the security insurance is supposed to provide would need an Obamacare-compliant plan. As mentioned above, there will be no requirement for the types of services these plans must cover. There would also be no requirement as to how much of your care they must cover – they could get you off after say, $10,000 of care. Or even $2000. And it will be extremely complicated to figure out exactly what you are buying when you choose one of the plans.
So someone who buys a Cruz plan might think they have real insurance, until the time comes that they get sick or injured and actually need any kind of significant care. This New York Times article does a nice job of conveying what these plans might look like, based on what many junk plans were like before Obamacare went into effect. (And this particular excerpt also makes the point that no matter how young and healthy you think you are, you never know when you a major health crisis might strike you):
Ned Scott, 34, who lives in Tucson, said the health plan he had before the Affordable Care Act left him with $40,000 to $50,000 in unpaid medical bills after he learned he had testicular cancer when he was in his late 20s.
“I thought it would cover things,” Mr. Scott said. But once he needed it, he learned the plan limited what it paid for outpatient care to $2,000 a year, and all of his treatment, from chemotherapy to CT scans, seemed to fall in that category.
And while proponents of the Cruz amendment argue that consumers should be free to buy those bare-bones policies if that’s what they choose, many consumers buy them without understanding that’s what they’re getting. The intricacies of health insurance contracts are very confusing, and one of the underappreciated benefits of Obamacare is how it simplified the “browsing” process with its tiered plans and across-the-board minimum standards. (See the note at the end of this post). These advantages would be gone under the Cruz amendment.
The Deception of it All (Or Lies Within Lies Within Lies . . .)
So really what we have with the Cruz amendment is a roundabout way for the Republicans to get rid of Obamacare’s protections for people with preexisting conditions while still being able to claim they are keeping their promise to preserve those protections. However they know full well that this plan breaks that promise. Even Iowa Senator Chuck Grassley, who has never been considered a “moderate” in this health care debate said just last week of the Cruz amendment that “There’s a real feeling that that’s subterfuge to get around pre-existing conditions.” Of course this was before McConnell had announced that he’d be including the provision in the bill. We haven’t heard a peep out of Grassley on the topic since.
Additional evidence for the fact that Republicans know how terrible this provision is comes from the fact that their only method for defending it is to lie about it. Cruz himself has been reassuring hesitant colleagues by telling them that the high premiums resulting from his amendment will be taken care of by federal subsidies. This is nonsense though because as of right now, nearly half the people who buy insurance on the individual market don’t get subsidies and will have to pay the full premium price.
Additionally, Republicans have lowered the income cap at which people stop receiving subsidies, so under their bill, even fewer people will receive subsidies than under Obamacare. (Under Obamacare people making up to 400% of the federal poverty level receive subsidies, the GOP bill lowers it to 350%). On top of this, the dollar amount of the subsidies that people will receive is significantly reduced under the GOP bill as compared to Obamacare. So Cruz’ defense is false on multiple levels.
Next, Cruz and other Republicans are touting some “extra funding” that will be given to states to be used to help high risk individuals pay these high premiums. However, they fail to mention that this funding is not actually “extra” but is simply money that is being double counted from a different part of the bill. This same pot of money is also promised to the states to help lower premiums in other ways (labeled in the bill as a “stability fund”). Obviously the same money can’t be used twice, so this is another lie.
Finally, Cruz and his GOP allies are telling people that there will only be a single risk pool under his amendment. In other words, the healthy people who buy the bare-bones plans and the sicker people who buy the (expensive) Obamacare-compliant plans won’t be separated into two pools for pricing/risk assessment purposes, but instead they’ll all be averaged together. If true, this would keep the Obamacare-compliant plan prices from sky rocketing, because they’d be averaged out with the healthy/bare-bones plans.
But every health policy expert who has weighed in on this, along with a group of actuaries [PDF] and health insurance companies themselves all say that it is impossible to do risk assessment that way. They say there would be no way to make that happen. Not to mention, simple logic tells us the “single risk pool” argument is bunk, because that would defeat the whole purpose of the Cruz amendment in the first place – to allow healthy people to buy dirt cheap insurance. So there’s yet another lie.
So these are 3 huge whoppers that Cruz and other Republicans are using to try to sell this terrible addition to their bill. And all of these lies are designed to hide the fact that they’re breaking their promise on preexisting conditions. They have made no honest argument in favor of the amendment. Probably because they know there is none.
And that is likely why the insurance companies, which had up to this point been fairly quiet in the health insurance debate (reportedly not wanting to get on the bad side of the Republican Congress) finally weighed in with an unsparing letter condemning the Cruz amendment. The letter says the amendment 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 . . .
this provision will lead to far fewer, if any, coverage options for consumers who purchase their plan in the individual market. As a result, millions of more individuals will become uninsured.
One Last Deception For Good Measure
And, if all of the above weren’t enough, McConnell had been planning to send the bill to a vote without having the Cruz amendment scored by the CBO. (A CBO score of this amendment is unlikely to be good for Republicans. At all). Republicans had conveniently “forgotten” to send the amendment to the CBO with the rest of the bill, and last week McConnell said there wouldn’t be time to wait for a score from them, which would take two to three weeks. (And why are we rushing again?).
But because Senate rules require that the entire bill have a score of some sort, McConnell planned to have the provision scored by the Trump administration’s HHS. In case the implications of that aren’t clear – HHS, led by Tom Price, is a partisan agency with a pretty clear bias. The CBO, on the other hand, is explicitly designed to be non-partisan and to do its work without bias (and since Republicans are so fond of labeling any facts that are bad for them “biased” or “fake” I’ll just take a moment to point out that Tom Price himself appointed the current head of the CBO, so if he were inclined to be biased, it would more likely be in their favor). In any case, now that the vote is delayed, McConnell no longer has this excuse for not waiting for a CBO score. But it won’t be a big surprise if he still manages to find a way around it.
*Print media that specializes in politics and/or health policy has actually done quite a good job covering the Cruz amendment. But coverage on tv and in the larger, mainstream print publications has been minimal or non-existent.
This is a real problem, because it means that the majority of the public isn’t hearing about it at all. Only people who have a deep interest in politics/policy plus the time to read more than just their daily paper will have an understanding of how drastically the Cruz amendment would change the individual market. And because the topic isn’t being talked about in a widespread way, there’s no swell among the public to put pressure on members of Congress to answer for where they stand on it, or why they’ve changed positions from where they were just a couple weeks ago.