Cruz Proposal Reminds State Insurance Regulators of 'Junk Insurance — NYTimes

Even Insurance Companies Say Cruz Amendment is Disastrous

Even Insurance Companies Say Cruz Amendment is Disastrous

And several Republicans have begun discussions with Democrats on working toward a bipartisan health plan, which is sure to only increase the tension between conservative and centrist Republicans. Ted Cruz, R-Tex., is expected to allow insurers selling individual plans that comply with Obamacare rules to also sell "non-compliant" plans in the same states.

The ACA did away with that, mainly by requiring that all health plans on the individual and small-group market include certain "essential benefits" for everyone: prescription drugs, lab services, even maternity care, to name a few.

The Cruz-Lee proposal would affect people who buy individual health insurance policies, not those covered by employers. "It shouldn't be the government dictating what insurance you can buy".

"The Cruz Amendment will lead to millions of Americans with pre-existing conditions out in the cold; there'd be virtually no real insurance for them", he explained. But risk adjustment "can only work when there are uniform benefit requirements across the market", the insurers warned ― and, under the Cruz proposal, benefits would vary wildly in the unregulated part of the market.

The GOP bill also would drastically scale back subsidies that help pay for insurance on the exchanges, making it a double whammy for customers already slapped with higher premiums.

Two of the insurance industry's most powerful organizations say a crucial provision in the Senate Republican health care bill allowing the sale of bare-bones policies is "unworkable in any form", delivering a blow to party leaders' efforts to win support for their legislation. Once again - and it can't be emphasized enough - Republicans are trying to clean up a Democrat-created disaster that has massively damaged the American health care system.

"Unfortunately, this proposal would fracture and segment insurance markets into separate risk pools (for the healthy and unhealthy) and create an un-level playing field that would lead to widespread adverse selection and unstable health insurance markets", the organization said in a memo it released Wednesday.

The Affordable Care Act also has tax credits that offset these higher premiums, but they are based on income, and not everybody qualifies ― leaving many people, particularly in the middle- and upper-middle-class, paying a lot more for coverage.

"As healthy people move to the less-regulated plans, those with significant medical needs will have no choice but to stay in the comprehensive plans, and premiums will skyrocket for people with preexisting conditions", the letter states. "This is sort of like what's happening under Obamacare".

One of the critical parts of the ACA was that it prohibits insurers from denying coverage to or charging more for people with pre-existing conditions. I don't know how many people not named Ted Cruz will be pleased with that. "If they are not heavily subsidized, they run the risk of becoming unsustainable and going into a death spiral". Because cutting taxes on the wealthy while slashing Medicaid was a transparent act of class warfare on the poor, the legislation no longer nixes Obamacare's tax on investment earnings or the additional Medicare tax on high earners.

"Millions of more individuals will become uninsured", the insurer organizations said, concluding that "we strongly oppose this provision". Hence the skyrocketing premiums under Obamacare. The latter could have a big impact on preexisting conditions. "This wouldn't take years".