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Forget “repeal and replace,” the oft-repeated Republican rallying cry against the Affordable Care Act.
House Republicans have advanced a package of bills that could reduce health insurance costs for some businesses and consumers, in part by rolling back some consumer protections. Rather than outright repeal, however, the more subtle effort could allow more employers to bypass basic health insurance review benefits requirements and most state standards.
At the same time, the Biden administration seeks to roll back some of the previous administration’s health insurance rules, proposing to tighten regulations again for short-term plans.
Health policy experts are not surprised. Most of the GOP’s policy ideas have long since won Republican support, raised concerns from Democrats about shrinking consumer protections, and could fall under the theme: everything old is new again.
Ultimately, the proposals rest on one issue, says Joseph Antos, a senior fellow at the American Enterprise Institute, a Washington, DC-based think tank. “The real problem is the rising cost of health care. It always has been,” he says. And that problem, he added, is bigger than the potential solutions.
“It’s not clear whether this kind of approach would substantially help many people,” says Antos.
So what’s on the table in Washington?
While the Biden administration’s proposed regulations on near-term plans are likely to go into effect, this year or early next, the GOP’s House-approved legislation dubbed the CHOICE Arrangement Act is unlikely to win favor in the Democrat-controlled Senate. If Republicans were to recapture the Senate and the White House, however, that illustrates the direction of health policy they could take.
Here are the big issues on the radar:
Less is less with short-term plans
These types of plans have been sold for decades, often as an interim measure for people between jobs.
They can be much less expensive than more traditional coverage because short-term plans “range from comprehensive policies to fairly minimal policies,” says Louise Norris, an insurance broker who writes regularly about health care policies.
Plans don’t have to cover all the benefits required by ACA plans, for example, and can block coverage for preexisting medical conditions, can set annual or lifetime limits, and often don’t include maternity care or prescription drugs. Despite alerts warning of a plan’s limits, consumers may not realize what isn’t covered until they try to use it.
Concerned that people would choose this option instead of the more comprehensive and more expensive insurance offered through the ACA, President Barack Obama’s administration established rules limiting policy terms to three months.
President Donald Trump’s administration relaxed those rules, allowing plans to be sold again as 364-day policies and adding the ability for insurers to renew plans for up to three years. Now President Joe Biden, whose representatives have called such plans “junk insurance,” is proposing to curb them again, limiting policies to a maximum of four months.
Biden’s proposal cites estimates from the Congressional Budget Office and the Joint Committee on Taxation that about 1.5 million people are enrolled in such plans.
Michael Cannon, director of health policy studies at the Cato Institute, a libertarian think tank, decried the proposed rule in an opinion piece. He wrote that the Biden proposal removes an important low-cost alternative and could leave some consumers facing “sky-high medical bills of up to a year” if their policies expire between open enrollment periods for ACA plans.
The real fight comes down to defining “short term,” says John McDonough, a professor of public health practice at the Harvard TH Chan School of Public Health in Boston who worked on the original ACA legislation.
Progressives and Democrats support the idea that the “short term” should end after four months and “then people get into an ACA or Medicaid plan,” he says. “Republicans and conservatives alike would like this to be an alternative permanent coverage model for people, some of whom legitimately know what they’re getting and are willing to roll the dice.”
Association health plans, self-insurance, and other workplace issues
Meanwhile, the House-passed CHOICE Arrangement Act would allow more self-employed workers and businesses to band together to buy the Association’s health plans, which are essentially large group plans bought by multiple employers.
These can be less expensive because they don’t have to meet all ACA requirements, such as coverage for a specific set of benefits that includes hospitalization, prescription drugs, and mental health care. Historically, some have also had problems with creditworthiness, and state regulators have investigated claims of false advertising by some association plans.
Another piece of legislation would help smaller employers self-insure, which also allows them to bypass many ACA requirements and most state insurance rules.
Both proposals represent a “chipping at the edges of the ACA structure’s foundation,” says McDonough.
The package also codifies Trump-era regulations that allow employers to provide workers with tax-free contributions to purchase their ACA qualified plan, a perk known as an Individually Covered Health Reimbursement Account.
The CHOICE Arrangement Act “will go a long way toward reducing insurance costs for employers while ensuring workers continue to have access to high-quality, affordable health care,” Rep. Tom Cole (R-Okla.) said in prepared remarks as the bill was introduced to the House Rules Committee in June.
Two of the associations and the self-insurance proposal drew opposition from the National Association of Insurance Commissioners, which wrote to House leaders that the package “threaten states’ authority to protect consumers and markets” because it affects states’ ability to regulate such plans.
Current law allows companies in the same industry to join together to buy coverage, essentially creating a larger pool which can then, in theory, wield more bargaining power and get better rates.
House legislation would make changes to allow more self-employed people and businesses that aren’t in the same industry to do the same.
“The big picture of what these laws do is allow [employers and] insurance companies to move away from the ACA’s standards and protections and offer cheaper insurance to younger, healthier groups of employees,” says Sabrina Corlette, researcher and co-director of the Center on Health Insurance Reforms at Georgetown University.
But attorney Christopher Condeluci, who has worked with GOP lawmakers in drafting legislation, takes a different view. The entire GOP package, he says, represents “improvements to the status quo” needed because small businesses and individuals face “health care costs that continue to rise” and “out-of-pocket costs that continue to rise.”
KFF health newsformerly known as Kaiser Health News (KHN), is a national newsroom that produces in-depth journalism on health issues and is one of the leading operational programs of KFF extension the independent source for health policy research, polling and journalism.
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