Conservatives’ latest Obamacare repeal proposal amounts to a sneak attack on one of the health care law’s most popular safeguards.
White House officials and members of the House Freedom Caucus are discussing giving states the option of a waiver from a key Obamacare protection — called community rating — as part of their fledgling last-ditch effort to revive the repeal effort.
Community rating is a wonky term for barring insurers from charging sick people more than healthy individuals for the same insurance policy. Without it, the health law’s popular pre-existing conditions provision is all but meaningless.
That makes community rating the unassuming but powerful little cousin of the law’s ban on denying coverage to people with pre-existing conditions. That bars insurers from denying coverage while community rating bars them from charging those people more.
The new proposal would essentially give lawmakers the cover to argue they are protecting people with pre-existing conditions while creating a framework that enables states to make those protections all but shot.
Without community rating, insurers could theoretically charge a healthy person $100 per month for a health plan and a sick person $10,000 per month for the same coverage.
“It is probably the most powerful protection for people with pre-existing conditions in the ACA,” said Larry Levitt, a senior vice president at the Kaiser Family Foundation. “Guaranteed access to insurance without any rules [about what it would cost] means protections for people with pre-existing conditions are completely illusory.”
The back-door assault on the pre-existing conditions ban is noteworthy because many Republicans, including President Donald Trump, have said they want to preserve the protection.
“You’re going to see preexisting conditions, but the price will be down, and the insurance companies can pay,” Trump said last year. “Yes, they will keep preexisting conditions, and that would be a great thing. Get rid of Obamacare, we’ll come up with new plans. But, we should keep preexisting conditions.”
Advocates of the idea to make community rating optional — including conservative groups such as Heritage Action — say they want to reduce Washington mandates on health insurance plans and drive down premiums. If community rating is eliminated, healthy people would probably see their premiums go down and sick people would pay more.
Moderate Republicans, who were concerned the Obamacare repeal plan would threaten coverage for people already enrolled in the ACA, are already balking at the idea, according to several moderates.
“I have seen nothing in terms of reported possible changes to American Health Care Act warranting reconsideration,” Frank LoBiondo (R-N.J.) tweeted soon after a Republican conference meeting Tuesday morning “I remain a NO.”
Other pieces of Obamacare’s “Title 1” insurance protections are also on the table. No decisions have been made about which would be optional. But so far, pre-existing conditions and the requirement that young adults can stay on their parents plan through age 26 won’t be optional, Republican sources say.
The proposal would put pressure on governors to decide whether to suspend community rating. Republicans, in particular, might be unhappy to be confronted by a Sophie’s choice: repeal an Obamacare provision and risk premium hikes for older, sicker people, or keep it and risk being labeled an Obamacare supporter.
House Republican leaders are taking pains to portray the community rating option as exploratory.
“These are ongoing talks,” Speaker Paul Ryan said Tuesday. “We want our members to talk with each other about how we can improve the bill to get consensus. Those productive talks are happening. We’re at the concept stages right now.”
The Senate is even more skeptical of a plan coming together.
“God bless ‘em,” Senate Majority Whip John Cornyn said of the news the House is reviving the Obamacare repeal effort. “I think they got a way to go. I heard the speaker talk about ‘conceptual.’ They were at concepts. So they got a ways to go but if they send a bill we’ll take it up.”
Seung Min Kim contributed to this report.