Senate Republicans introduce the Cruz Amendment
A revised BCRA bill guts pre-existing condition protections while keeping steep Medicaid cuts
After a grim report on the bill’s effects from the Congressional Budget Office and a week of withering scorn from constituents over the Fourth of July recess, the Senate has returned to the task of repealing and replacing the Affordable Care Act (ACA), releasing a revised version of the Better Care Reconciliation Act today. The revision includes an amendment by Ted Cruz (R-TX) and Mike Lee (R-UT) in a bid to win over balking hardline conservatives. Despite threats from moderate Republicans, the revision doesn’t change any of the massive Medicaid cuts contained in the original draft of the bill.
The Cruz/Lee Amendment is the central change to the Senate’s health bill. If placed into effect, it would allow insurance providers in the individual market who sell at least one plan that complies with the ACA’s Essential Health Benefits, they can sell other plans that don’t meet those standards. These “non-compliant” plans would also be exempt from a host of other protections: guaranteed issue, community rating, preventive services, prohibition on pre-existing condition exclusions, limits to waiting periods, and prohibition of discrimination by health status. In effect, the Cruz amendment bifurcates the market into healthy people on cheap, skimpy plans while people with pre-existing conditions are forced to buy more expensive plans.
This is the Senate’s way of eliminating protections for Americans with pre-existing conditions. The Cruz amendment welcomes the return of medical underwriting, the process by which insurers rejected individuals they deemed too costly to insure. Patients with costly pre-existing conditions would be barred from “non-compliant” plans, and would only be able to buy plans that retain ACA protections. This creates a risk-pool made up only of those who need more expensive medical care, leading to higher and higher insurance costs and premiums. Healthy individuals would likely look to the “non-compliant” plans for something more affordable, despite receiving fewer benefits from their insurance plan. The CBO already trashed similar “junk plans” in their report on the original bill, stating that many families would simply opt to go without insurance and hope for the best rather than pay for plans with fig leaf coverage.
This amendment is a compromise on ideological grounds, without a sound policy footing. It is targeted to win over hardline conservatives who thought that the original repeal bill didn’t go far enough in rolling back Obamacare protections. Ironically, it is the final straw in aligning all players in the health care field against the repeal effort. While patients, nurses, doctors, and hospitals all came out against the ACA repeal effort early, insurance company providers dragged their feet and stayed quiet, hoping to get a better deal. In the wake of the Cruz amendment, the insurance lobby slammed the bill, raising concerns the bill would destabilize insurance markets.
For moderates, there’s little to like in the revised draft. The drastic Medicaid cuts that first raised alarms are unchanged from the original bill. The new draft increases opioid spending from $2 billion over one year to $45 billion over eight years for addiction treatment as well as pain treatment and substance use disorder research. However, addiction experts say that this amount will still fall short of solving the problem, especially considering the billion-dollar cuts to Medicaid, which is currently the largest provider of substance use resources.
The revised draft also walks back some of the tax cuts Republicans initially proposed, including a controversial retroactive investments tax cut. Curiously, this means that the government will still keep some $231 billion, yet none of this is being used to counteract the Medicaid cuts causing moderate Senators to threaten voting against the bill. The new draft would also allow greater contributions to Health Savings Accounts (HSAs), and allow families to use their HSA to pay insurance premiums. For many families, using an HSA to pay insurance premiums defeats their purpose — if you have to dip into the savings account to pay monthly premiums, there won’t be anything left when medical bills come due, especially as HSA plans are typically combined with high deductibles. Instead, this may be a boon for wealthy Americans who can use their HSA as a tax-protected account to pay for their insurance.
The Senate has followed the House’s plan for repeal: introduce a bill that threatens to uninsure some 20+ million Americans by gutting Medicaid while touting tax cuts for the rich and freedom of choice in insurance plans, then double down by eliminating coverage protections for people with pre-existing conditions. The difference is that the Senate proposal does so with even steeper cuts to Medicaid and a scheme for the individual market that insurance companies worry could destabilize their business.
