The Senate bill allows states a huge amount of leeway to get rid of insurance requirements.
The Senate Republicans’ health care plan would give governors virtually unchecked discretion over health insurance plans. In red states with governors hostile to health care expansion, such as Texas, that could mean loss of coverage and skyrocketing costs for patients. Governor Greg Abbott would be able to determine what is covered in Texans’ health insurance, and how much they pay.
Nestled near the bottom of the Senate legislation is a provision that would allow governors and state insurance commissioners to waive health insurance requirements without the consent of the state’s legislative body. The bill would require federal officials to approve proposed changes as long as they don’t add to the deficit, even if they would result in price increases or coverage losses for constituents.
“It’s very easy to spend less on health care, you can cut benefits and save a lot of money,” said Stacey Pogue, senior policy analyst at the left-leaning Center for Public Policy Priorities. “It’s kind of shocking the degree to which this waiver includes no insurance standards. The state could submit a waiver without legislative approval, kick millions off their insurance and the federal government would have to approve it.”
These waivers could include allowing insurers to stop covering essential health benefits such as maternity care and emergency services, or getting rid of caps on out-of-pocket costs.
Currently, the Affordable Care Act allows states to apply for a waiver from the federal government to do away with certain provisions of the health care law. The waiver plan must first pass the state legislature and be approved by the governor. Then state officials are required to prove that their plan meets a strict set of criteria: It can’t reduce the insured population, the robustness of the insurance, or its affordability, and it can’t add to the federal deficit. If these standards are met, federal officials may choose to approve the state proposal.
The draft Senate bill, called the Better Care Reconciliation Act, states that the federal government shall approve any state waiver requests, and requires only that they not increase the federal deficit.
We’ve already seen what the individual market in Texas looks like absent essential health benefit requirements, Pogue notes. In 2013, before the Obamacare exchanges, not a single insurance plan on the individual marketplace in Texas included maternity coverage. Before the ACA set out-of-pocket maximums ($7,150 this year for an individual plan before subsidies), some of the cheapest policies had $10,000 deductibles and didn’t cover the most expensive services.
The nonpartisan Congressional Budget Office said in a report Monday that most of the people affected by these additional waivers would be in states that limit the health benefits insurers are required to cover. This would lead to lower premiums overall, but coverage for high-cost services like maternity care and mental health care “would become extremely expensive,” CBO said. The waivers could also allow states to use the federal funds for purposes outside health care, the agency notes.
Once the waiver is granted it can’t be taken back for several years, even if there’s evidence that a state egregiously misused its funds. Even if “state officials blow the Obamacare money on cocaine and hookers, there’s apparently nothing the federal government can do about it,” wrote University of Michigan Law School professor Nicholas Bagley.
Texas has the highest uninsured rate in the United States, and Abbott declined a federally funded Medicaid expansion that would have covered 1.1 million more Texans. Nearly 2.5 million Texans could lose their health insurance under the Senate bill by 2026, including about 1.9 million Medicaid enrollees, according to a report from the left-leaning Center for American Progress released Tuesday.
The governor’s office did not respond to a question about what kinds of coverage waivers, if any, Abbott would pursue under the Senate health proposal. Texas is currently without an insurance commissioner, a post appointed by the governor, after David Mattax died in April.
Republican Senate leaders are scrambling to gather support for their health care bill, ahead of a planned vote after the July 4th recess. Texas Senator John Cornyn, who is the majority whip, had been pushing for a quick vote this week, but leadership does not currently have enough votes. Fellow Texas Senator Ted Cruz is part of a small group of Republicans advocating for a more conservative health care bill.