This is nuts. Straight. Up. Nuts.
Right now, Republicans are negotiating a last-minute deal to save their health care bill before Thursday’s vote in the House that, were it to actually become law, could have massive repercussions for the entire U.S. health care system. It would simultaneously be an enormous blow to the sick and a boondoggle for taxpayers that would turn the whole individual insurance market into an opportunity for insurers to skim money from the government by selling junk coverage.
I really, really wish I was exaggerating. But no.
According to multiple reports, the White House is trying to win over votes from the archconservative Freedom Caucus by adding an amendment to its health care bill that would kill off Obamacare’s “essential health benefits” rules. Those regulations require insurers to cover 10 different areas of care—things such as hospital and outpatient services, prescription drugs, and mental health and maternity care. Liberals like the rules because, among other things, they ensure that when people pay for coverage, they get something of value. (Back in the pre-Obamacare days, people often bought cheap coverage, only to discover it was worthless once their hospital bills arrived.) Republicans dislike the essential benefits, however, because they make coverage more expensive. Which is true. When insurers actually have to cover stuff, it costs more.
Getting rid of the regulations has been at the top of the Freedom Caucus’ wish list, because it would allow premiums to drop for people who don’t need much in the way of actual benefits. Unfortunately, it would also turn the insurance market into a massive exercise in graft by allowing insurers to game the living hell out of the subsidy system that Republicans are presently setting up.
Remember, the GOP plan offers Americans who make less than $75,000 flat tax credits to help buy insurance, and these credits go up as you age. If you’re under 30, you get $2,000 toward your premiums; if you’re between 30 and 40, you get $2,500, and so on. If there are no rules about what insurers have to cover, companies will design extremely pared-down health plans that cost exactly as much (or maybe just below) what the tax credit is worth. Sure, they won’t really provide much in the way of actual help if someone gets sick, but to insurance buyers they’ll be free.
It doesn’t take a lot of imagination to see how this leads to companies hawking lots of dubious insurance products at unsuspecting customers. Forgive the quoting of my own tweet:
Of course, those free, threadbare plans will appeal to young people who might otherwise go uninsured, thus gobbling up the most profitable part of the market. That will leave carriers hesitant to offer more comprehensive coverage that actual sick people might want to purchase. Older Americans who want assurance that someone will cover their hospital bills are going to end up paying through the nose for it.
And all this dysfunction will be fueled with billions in taxpayer dollars. Because, again, if the plans are free after the tax credit, there’s no reason for people not to snap one up. Whatever the Republican tax plan was supposed to cost before, it’s probably going to be whole hell of a lot more expensive now.
Of course we won’t know for sure before the House vote—which, again, is this Thursday—because the Congressional Budget Office won’t have time to score the plan. To be clear, we do not know for sure whether this bargain will make it into the final bill. It’s also an open question whether it would be allowed into the legislation under the budget reconciliation rules the Senate will be using in its attempt to pass the legislation. But this whole exercise still feels like some nightmare version of a high school kid writing his term paper a 2 a.m. the morning before it’s due. Except in this case, it’s Donald Trump and a couple fringe right-wing ideologues rewriting the whole damn health insurance system. God save us all.