Policy

Insurance Lobby Warns Against Cruz Amendment

Sen. Ted Cruz, R-Texas, has sponsored an amendment to the GOP health bill that the health insurance industry opposes. (Tom Williams/CQ Roll Call)

Health insurance lobbying groups are raising concerns about a proposed amendment to the Senate health care bill, warning that a proposal from Sen. Ted Cruz would destabilize and fracture the individual insurance market.

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. Senate leaders hope to bring the health care bill to the floor next week.

America’s Health Insurance Plans is warning in a document obtained by CQ Roll Call that the proposal would segment the individual market into separate risk pools and create an uneven playing field.

“This is particularly true for patients with pre-existing conditions who would be most affected and potentially lose access to comprehensive coverage and/or have plans that were far more expensive, as premiums in the Exchange market would rise much faster than under existing market conditions and insurance options dwindle,” the white paper reads.

The group warns that offering non-compliant plans could lead to higher premiums and lower enrollment on the exchanges and that individuals with pre-existing protections could lose protections. It could lead to the exchanges functioning like a high risk pool, AHIP says. It would be “infeasible” to combine plans that complied with the health law and those that didn’t into one risk pool, the paper says.

“It is important that policymakers avoid policies that threaten to further increase uncertainty or threaten stability,” the document says. “Such policies include opening up non-compliant plans to new enrollees, bifurcating the risk pool, or allowing plans covered by different rules to compete in the same market.”

The Blue Cross Blue Shield Association expressed similar concerns.

Scott Serota, president and CEO of the Blue Cross Blue Shield Association, said in a Tuesday letter to Cruz and Lee that the amendment is “unworkable as it would undermine pre-existing condition protections, increase premiums and destabilize the market.”

“We believe strongly that requirements must apply equally to all competitors selling insurance in state individual and small group markets,” Serota said in the letter. “A level playing field is important to assure effective competition, choice and affordability.”

The Cruz amendment has the backing of the White House and other conservatives such as Utah GOP Sen. Mike Lee. But top Senate Republicans have said a decision on its inclusion in a final measure could be heavily influenced by an analysis by the Congressional Budget Office. And moderate Republicans such as Maine Sen. Susan Collins have slammed the proposal.

Sen. Mike Rounds, R-S.D., proposed setting a ratio between the costs of different plans, but told reporters Tuesday it wasn’t clear whether that would be in a final version of the amendment.

Under the amendment, about 1.5 million people with pre-existing conditions could face higher premiums or be unable to get coverage they need, the nonpartisan Kaiser Family Foundation found in a report released Tuesday.

GOP leaders briefed the caucus on a revised bill during Tuesday’s policy lunch, and are expected to release an updated draft Thursday. Senate Majority Leader Mitch McConnell of Kentucky maintains he will bring the measure to the floor next week, although 50 Republicans do not currently support the measure and it’s unclear whether the revised bill will sway enough of the 10 senators who have publicly opposed the current draft.

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