House Republicans have rallied behind the cause of people getting insurance cancellation notices—and, on Friday, they will vote on a measure that will purportedly allow these people to keep their current policies. The bill might not work as intended, but it might well have another set of consequences. It would allow insurer companies to keep discriminating against the sick, while selling people policies that leave them exposed to crippling bills in case of serious illness.
A vote for the Upton bill, in short, is a vote for everything Americans say they hate about their health care system.
The bill's official name is the “Keep Your Health Plan Act of 2013.” It has just two substantive sections. The first says that insurers may continue to sell plans available on the market now, regardless of whether those plans satisfy Obamacare regulations for benefits, pricing, and availability. The second says that any policy insurers sell would satisfy the individual mandate—i.e., the requirement that everybody carry comprehensive insurance or pay a fee. By my count, the whole bill is about 235 words long. That’s including the subheads, legislative numbers, and so on.
Republicans might think such brevity is a virtue. Actually, it's a sign of how little the sponsors have thought through—or care—about its potentially far-reaching effects.
The bills' actual impact on people losing coverage is difficult to know. It would not require insurers to keep offering the old plans; having gone through the motions of cancelling the policies, carriers might decide it's not worth starting them up again. Salon's Brian Beutler (who is the exception to the rule that political reporters don't understand policy) has suggested the bill's ultimate impact might be a big pffffft, because insurers are locked into their 2014 plans and figure they can live with the new market. That's possible. But it could also be bad news—very, very bad news—for the many millions of un- and under-insured Americans who hoped to buy decent private insurance starting next year.
As you probably know, a primary goal of the new law is to change insurance company practices, so that they can no longer charge higher prices, withhold benefits, or deny coverage to people with pre-existing medical conditions. Another goal is to eliminate the sale of insurance policies that leave people exposed to massive bills they could never afford. The Upton bill would undercut both efforts, for reasons that Sarah Lueck of the Center on Budget and Policy Priorities laid out earlier this week:
…by grandfathering a swath of non-ACA-compliant plans, the bill would allow insurers to continue to offer individual-market health plans that don’t include essential health benefits. Plans could continue to have coverage gaps such as lack of prescription drugs, maternity care, and mental health and substance abuse treatment, as they often do now. These plans also wouldn’t have to cover preventive services at no cost to enrollees. And enrollees could continue facing high out-of-pocket charges even forcovered benefits because the plans would not have to comply with the ACA caps on annual out-of-pocket costs.
As noted, the Upton bill would also allow insurers offering non-ACA-compliant plans to deny coverage to people who have health conditions and to charge sicker or older customers far higher premiums than healthier and younger people. In addition, these plans would be exempt from reviews to determine whether their premiums are reasonable and from the ACA’s prohibition against using benefit designs and marketing tactics that discriminate against people with high-cost health needs.
Note that the Upton bill doesn’t seek simply to leave existing policies in place for people who have them. It would also allow insurers to sell the policies to new customers. That goes way beyond grandfathering, because the cheaper, skimpier plans would siphon off the healthiest enrollees—and do so in perpetuity. This (probably) makes it worse than the (still objectionable) proposal Democrat Mary Landrieu has proposed in the Senate. If the Upton bill passed, Obamacare’s reforms of the market might become effectively meaningless. In short, the Upton bill is a not-thinly-disguised effort to repeal the Affordable Care Act.
That’s fine: Republicans have voted to repeal it 46 times. Who cares if it’s 47? But the Upton bill is a reminder of where Republican priorities truly lie.
Upton wants to help people who, thanks to Obamacare, can’t keep their current policies. Fine, there’s an argument for that. But what about the millions who, thanks to Obamacare, will get coverage for the first time? Or the millions more who will enjoy protections they never enjoyed before? A serious effort to promote the public good would find some balanced way of helping the relatively small number of people losing plans without undermining efforts to help the much larger number of people who stand to gain insurance, or at least decent insurance, for the first time. It wouldn't be easy to do and, if truly effective, it would take some money. But Upton and his allies aren't even trying to find this balance. They're just taking a wrecking ball to reform, including the parts that will help millions get health care.
Of course, even people holding onto grandfathered policies—the intended beneficiaries of Upton’s bill—might not be better off if his measure became law. Sure, they might have low premiums right now. But in the famously dysfunctional non-group market, insurers have been known to jack up rates when a particular group of policyholders ages, so that they are no longer profitable to insure. People who had these policies might also discover, upon getting sick, the premiums were low for reason: Weak coverage leaves them to tens of thousands of dollars in bills.
Nervous Democrats on Capitol Hill may be tempted to vote for the Upton bill. They shouldn't be.
Note: I updated this item with a link to Beutler's Salon piece and added more uncertainty to my predictions. It's a good rule of thumb for the next few days: If officials and lawmakers start mucking around with grandfather clauses or other aspects of the law, nobody can be truly certain how the market will react.