What Kind of Health Insurance Would the 'Cruz Amendment' Provide?

Henrietta Strickland
July 18, 2017

Over at Slate, Jim Newell assesses the latest political status of the Cruz/Lee "Consumer Freedom" amendment (which Peter Suderman preliminarily addressed on policy grounds here last month), noting that "as now proposed, [it] would cause too many moderates to flee, since it would undermine pricing protections for those with pre-existing conditions". The Texas Republican is pushing to allow insurers to sell policies on the federal exchanges that don't meet the regulations laid out in the 2010 health care law (PL 111-148, PL 111-152), so long as an insurer offers one plan that does comply with the law.

The Cruz amendment - which has been inserted into the Republican Senate health plan - is smart because it doesn't take anything away from anyone. Ted Cruz, R-Texas, and Mike Lee, R-Utah, dubbed the Consumer Freedom Amendment.

And if you're a woman who had no health insurance and is trying to find a plan that covers your family planning-be it birth control to prevent an unintended pregnancy or the cost of maternity care if you are pregnant-you'll have to wait six months before you're allowed to shop for a plan under the Cruz amendment.

One option that's gaining steam, because it sounds like it could work in the abstract, is being pushed by South Dakota Sen.

DeMint added that the Cruz-Lee amendment could save Americans from skyrocketing premiums.

"I talked to Sen". From the insurers' perspective, the only catch was that they would have to offer at least one ACA-compliant plan to the same population to qualify to sell the skimpy plans. "And if [insurers cut the price on a cheaper] pool, they have to cut the price on the most expensive pool as well".

To address concerns that Cruz's amendment would lower prices for the young and healthy by making them skyrocket for the people who need a comprehensive insurance plan or have a pre-existing condition, the amendment purports to allocate billions in additional funding that states could use "to assist such health insurance issuers in covering high risk individuals".

Realizing he'd made no friends and claimed no legislative achievements in his first four years in the Senate, Cruz decided this year he'd shed his image as an obstructionist grandstander and adopt the pose of a diligent dealmaker on health care, the issue he used to stage a government shutdown in 2013.

But the proposal could face complications from the Senate's arcane rules. That means premiums on the exchanges will rise, unless they're offset by all those billions of dollars set aside to help states drive down premiums and out-of-pocket costs.

So would Rounds' idea be something the GOP leadership would look at? We think they should do a complete repeal; we support the Cruz-Lee amendment, we call it the "opt out" amendment. Roy Blunt and South Dakota Sen. Tethering highly regulated plans to wholly unregulated plans could be like tethering a hot-air balloon to Jell-O. "So kind of linking those premiums together would require a pretty significant regulatory apparatus". Cruz's amendment is simply a continuation of this idea. This would effectively transition the exchanges into "high risk pools". This is similar to the "risk-adjustment" transfers that now occur under Obamacare, but doing it between regulated and unregulated plans would be harder.

In the alternate plans, insurers could reject applicants or charge them more based on their health history. Financial analysts have said this, insurance actuaries have said it, even the federal government has said it.

The Congressional Budget Office, the nonpartisan entity that scores legislation for impact and cost, considers people with these policies to be uninsured, "because they do not have financial protection from major medical risks".

The Senate bill is also likely to lead to rising costs for people with illnesses, preexisting conditions, and also older adults, which could further disrupt the insurance market. The former would amount to throwing money at a policy error. State government, collapsing financially, should want money more than all of them.

Health-care policy analyst Adrianna McIntyre noticed an interesting fact about these insurer departures.

Other reports by Click Lancashire

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