Public policy experts, health care advocacy groups, and insurance industry representatives often don’t agree on how the government should regulate the sector that accounts for roughly one-sixth of our economy. But all have reached the same conclusion about the bill that may come to a vote in the U.S. Senate next week: the latest version of the Better Care Reconciliation Act (BCRA) would cause Americans with chronic or expensive medical conditions to pay much higher rates or lose insurance coverage entirely.

Iowa’s Senators Chuck Grassley and Joni Ernst have repeatedly said people with pre-existing conditions would be protected in any Republican bill to repeal and replace the 2010 Affordable Care Act. Now, they are poised to break that promise.

Officially, Grassley and Ernst have not said whether they will vote for the BCRA, which is unpopular among Iowa voters. But as was true last time Bleeding Heartland checked in on this issue, no one closely watching the health care debate sees Iowa’s senators as questionable votes. Congressional reporters on the health care beat don’t list Grassley or Ernst on their “whip counts” of Republicans who might oppose the bill.

Republican leaders also have yet to indicate any concern about winning over Iowa’s senators. In contrast, they added an amendment offered by Senator Ted Cruz to the bill to bolster support among conservatives (more on that below). The new draft also includes a big “polar payoff” to “send hundreds of millions of extra federal dollars to Alaska,” a gesture to Senator Lisa Murkowski. For other Senate moderates, the revised BCRA would provide more money to reimburse insurance companies that lose money on very sick patients. To win over Senators Shelly Moore Capito and Rob Portman, the BCRA would allocate $45 billion more for grants related to opioid addiction (a small fraction of what a comprehensive effort in this area would cost, and “drastically short of what would be needed to make up for the legislation’s deep cuts to Medicaid”).

Ernst told an audience in Harlan on July 10 ,

“I am not going to say whether I would or would not support that bill, because I am offering up my own ideas, my own suggestions, and I’d like to see them included in the bill,” Ernst said. “We’ll continue with those discussions.”

Ernst said her office is drafting several possible amendments, although she declined to describe them to reporters.

None of the reports on the draft released yesterday (for example, here, here, here, or here) mentioned any language that came from Ernst or was designed to appease her.

For some reason, Grassley has avoided stating explicitly that he will vote for the BCRA. But he keeps pushing a line he has argued for months: Republicans must replace the 2010 health care reform law. Grassley didn’t schedule any public meetings during the latest recess, but at one of his private events, he told concerned Iowans in West Burlington that Obamacare’s promises “have not materialized,” and “we gotta act” after promising repeal since 2010. Two days later, Grassley tweeted,

52 Republicazn senators shld be ashamed that we have not passed health reform by now WE WONT BE ASHAMED WE WILL GO FROM MAJORITY TO MINORITY

— ChuckGrassley (@ChuckGrassley) July 9, 2017

Speaking to an ABC-5 news reporter on July 11, Grassley said, “There’s a great responsibility of those who have run on a platforms for three elections saying the shortcomings and the promises that weren’t kept under the Affordable Care Act […] If we don’t keep those promises, I think that people are going to be dramatically disappointed.”

In other words, Grassley’s a yes on any bill that comes to the Senate floor.

WHAT THE CRUZ AMENDMENT WOULD DO

The latest draft of the BCRA scales back some tax cuts for the wealthy and alters insurance market regulations in various ways, while keeping language that would dramatically reduce planned federal spending on Medicaid over the next decade. The Washington Post published a helpful chart showing the most significant changes. Margot Sanger-Katz highlighted key points in her latest article for the New York Times.

The most important new language is in the Cruz amendment. Sarah Kliff explained at Vox,

Deductibles would almost certainly rise under the Republican plan, as would overall costs for low- and middle-income Americans. Individual market participants would have more options to purchase catastrophic coverage, an option likely to appeal to those with few health care costs. […]

Perhaps the biggest policy change in this revision is an amendment to allow health insurers to deny coverage based on preexisting conditions and cover few benefits, so long as they offer a comprehensive plan that covers the Affordable Care Act’s mandated benefits.

These deregulated health plans would be allowed to charge sick people higher premiums or simply deny them coverage. They would not have to pay by the rules of the preexisting condition ban that the Affordable Care Act sets up (Phil Klein at the Washington Examiner has a summary of the rules they’d be exempted from here). Instead, they would operate much like health plans in the pre-Affordable Care Act market, offering cheap rates to consumers they believe would have low medical bills.

Health policy experts know exactly how this would play out: Healthy people would pick the skimpier plan, while the comprehensive plan would essentially become a high-risk pool for sicker Americans.

Grassley and Ernst have both said they support fewer mandates on what health insurance must cover. During her July 10 event in Harlan (video clip available on the Des Moines Register’s site), Ernst advocated “allowing states the flexibility to decide on what those essential health benefits are,” to provide more “flexibility in the market.” Without naming Cruz, she described his amendment favorably: “as long as there are at least one plan that is offered through the exchange that covers every, all of the essential health benefits, then those insurance companies would be allowed to offer plans out there that don’t cover” the full range. “It’s allowing flexibility,” Ernst repeated, insisting that people with pre-existing conditions would be able to get coverage.

Grassley was closer to the mark when he told Iowa Public Radio on July 5 that he was concerned about the Cruz amendment.

“There’s a real feeling that that’s subterfuge to get around pre-existing conditions,” says Grassley. “If it is subterfuge and it has the effect of annihilating the pre-existing condition requirement that we have in the existing bill, than obviously I would object to that.”

But the very next day in West Burlington, Grassley called for giving consumers more choices rather than requiring “one size fits all” health insurance plans.

Yesterday, neither Grassley nor Ernst expressed concern about the Cruz amendment. Nor did any other other GOP senators who had previously criticized the idea, Caitlin Owens reported for Axios. A Senate GOP aide told Owens that opposition is “melting away,” because “No one wants to be bad guy.” Note that in this rendering, a “bad guy” would be the person who tanks the BCRA–not the person who makes health care inaccessible to millions of low-income, sick, or older Americans.

For those who distrust health care policy wonks or authors on progressive news sites, look at what the American Hospital Association had to say about the latest BCRA: “unacceptable,” with “real consequences for real people–among them people with chronic conditions such as cancer, individuals with disabilities who need long-term services and support, and the elderly.” Along the same lines, 32 advocacy groups dedicated to fighting various types of cancer view the bill as “a direct threat to cancer patients,” because it would “erode protections for people with pre-existing conditions and make comprehensive insurance unaffordable for millions.”

Even insurance industry representatives agree that the Cruz amendment would hurt people with pre-existing conditions. Margot Sanger-Katz reported for the New York Times,

Two of the biggest insurance industry groups, which have been largely silent as the health debate has played out, spoke out Wednesday [July 12] in opposition to the amendment. America’s Health Insurance Plans and the Blue Cross Blue Shield Association indicated that they did not wish to operate in the regulatory landscape created by the bill, which they said would split the insurance market in two.

Sicker patients would be likely to flock to more comprehensive coverage, driving up prices, while healthier patients would be more likely to choose stripped-down plans with fewer benefits and financial protections. Those slimmer plans could be a good deal for some Americans in good health, particularly upper-middle-class professionals, whose premiums have risen under the Affordable Care Act.

But those customers could be at a disadvantage once they become sick, since the rules-free plans could be canceled at the end of the year, and premiums would be likely to rise sharply for the heftier plans that would take all comers. […]

Actuaries were puzzling over the details Thursday afternoon. “How could this work? I don’t see how,” said Cori Uccello, senior health fellow at the American Academy of Actuaries.

The CEO of the Blue Cross Blue Shield Association said the Cruz proposal is “unworkable as it would undermine pre-existing condition protections, increase premiums and destabilize the market.”

America’s Health Insurance Plans (the largest trade group for health insurance companies) warned in a new statement this week, “Allowing Health Insurance Products Governed by Different Rules and Standards Would Further De-Stabilize the Individual Market and Increase Costs for Those With Pre-Existing Conditions.” (emphasis in original)

Stable and well-functioning insurance markets require broad-based enrollment and a stable regulatory environment that facilitates fair competition and a level playing field. Unfortunately, this proposal would fracture and segment insurance markets into separate risk pools and create an un-level playing field that would lead to widespread adverse selection and unstable health insurance markets. 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.

• Opening up non-compliant plans to new purchasers would create greater instability in the marketplace, according to non-partisan experts such as the American Academy of Actuaries. A key contributing factor to the current risk pool instability in certain states was the transitional policy, which allowed individuals to renew non-compliant plans. That is because it segments the market—allowing healthier individuals to remain in their existing medically- underwritten plans while depriving the new Exchange markets of younger and/or healthier individuals necessary for risk pool stability. Actuaries estimated that states adopting the transitional policy experienced 10% higher rates for the Exchange market than states that did not elect this policy. Proposals to re- open non-compliant plans would create even greater instability by driving adverse selection and an acceleration of the downward spiral in the Exchange markets of higher premiums and lower enrollment.

• The requirement that insurers also participate in the Exchange market would not preserve protections for those with higher-than-average health care costs. Such protections—such as guaranteed issue, community rating, and banning pre-existing conditions—only work if there is broad participation to assure stable markets and affordable premiums. By bifurcating risk pools and
creating separate parallel market—where healthy individuals can select underwritten plans at a preferred rate—this proposal would cause lower enrollment in Exchange markets of the younger and heathier individuals necessary for a stable insurance market. As a result, the Exchange markets would basically function like a high-risk pool—with unaffordable premiums for those with pre-existing conditions. As premiums rose, only those with the highest health needs and expenses would remain thereby accelerating the decline in the Exchange market.

• Including both “compliant” and “non-compliant” plans in a single risk pool would be infeasible and not solve the problems of an unlevel playing field. For a single risk pool to work, all health plans must provide coverage for the same benefit categories – for example, under a common federal benefit “floor.” However, if “skinnier” non-compliant plans could exclude coverage of certain benefit categories (e.g., prescription drugs or maternity) while compliant plans must cover all benefit categories, it would be very challenging to combine those products into a single risk pool. Moreover, important premium stabilization programs such as risk adjustment that compensate plans enrolling higher risk individuals and protect against adverse selection would become unworkable and unsustainable because of likely differences in the benefit categories, health status and costs of enrollees in compliant versus non-compliant plans.

We will soon learn whether Grassley and Ernst meant what they’ve said about keeping health insurance accessible to people with pre-existing conditions.

UPDATE: Jeremy Dumkrieger of Sioux City wrote an open letter to Ernst and Grassley sharing how his wife’s thyroid cancer treatment nearly bankrupted their family. Dumkrieger is also the Woodbury County Democratic Party chair.

The Senate health care bill was already unpopular with Iowans, even before the latest revisions made the legislation worse.

And if you missed Bleeding Heartland user treegirl’s guest post earlier in the week, I recommend her review of some lesser-known policies at risk if Congress repeals the Affordable Care Act.

SECOND UPDATE: On July 14, the top executives of the Blue Cross Blue Shield Association and America’s Health Insurance Plans wrote to Senate leaders saying that the “Consumer Freedom Option” (the Cruz amendment) “is simply unworkable in any form and would undermine protections for those with pre-existing medical conditions, increase premiums and lead to widespread terminations of coverage for people currently enrolled in the individual market.”

Here is the form letter Ernst is sending to Iowans who left her a message about health care reform after participating in a brief, unadvertised “telephone town hall” last week. The person who shared this communication noted that it did not respond to points made in her original message (describing how the Affordable Care Act had helped her obtain health insurance and urging Ernst to fix the current law rather than scrap it).

Thank you for taking the time to participate in my Telephone Town Hall meeting on Wednesday, July 5, 2017. I regret that I was unable to answer every question during the call, but I appreciate your inquiry about the ongoing repeal and replacement of the Affordable Health Care Act (ACA). I understand there are strong feelings about health care reform on both sides, and it’s important for me to hear directly from Iowans on this important issue.

At this time, I am carefully reviewing the revised discussion draft of the Better Care Reconciliation Act (BCRA) to see how it will affect insurance availability and affordability in 2018 and beyond. It’s important to keep in mind that the draft is subject to additional changes during the amendment process. Your feedback is critical at this time as I continue to review these proposals.

As you may know, folks in Iowa’s individual market will likely see another massive rate increase next, as Medica will be the only insurance provider selling individual market plans in every county statewide for 2018. The reality is that the ACA continues to fail Iowans as costs rise and choices dwindle, and action is needed to ensure folks have access to affordable and patient-centered health care coverage.

We must continue to have an open dialogue as Congress continues to work on health care reform. Thank you again for taking the time to contact me and I hope this letter has helped answer your question. I cannot emphasize enough how important your input is at this time and I look forward to hearing from you in future Telephone Town Hall Meetings.

Sincerely,

Joni K. Ernst
United States Senator

Ernst’s letter does not acknowledge the reality that according to the Congressional Budget Office, premiums for older and sicker people will skyrocket under the BCRA.

Another Iowan posted a form letter received from Grassley’s office on July 13. Here’s the portion related to health care policy:

Thank you for taking the time to contact me. As your Senator, it is important for me to hear from you.

First, I appreciate hearing your thoughts about legislation proposed to replace the Affordable Care Act, or Obamacare. The American Health Care Act (AHCA) passed the House of Representatives on May 4, 2017 and a draft reconciliation bill is now under consideration in the Senate. Obamacare has been a case of over promise and under delivery. Iowans were told their premiums would decrease by $2500, but instead, they have gone up by as much as 43% this year and will possible go up another 43% next year. Additionally, soaring copayments and deductibles have made Obamacare too expensive to use. Iowans were told they would be able to keep their health plans if they liked them. Instead, many Iowans lost the plans they liked when Obamacare rolled out. Now, 72,000 Iowans face hardship keeping Obamacare this fall. Even if there are policies available to purchase, people will be hit hard by higher premiums. Separately, those who are enrolled in Medicaid are in a program that can’t continue indefinitely at its current rate of spending. The changes proposed are to make the program sustainable for the most vulnerable people who currently need it and those who will need it in the future.

The Senate legislation would bring immediate relief to the 72,000 Iowans on Obamacare. The Medicaid changes would go into effect much more gradually giving Congress time to assess the results of the changes and make adjustments. I have heard from thousands of Iowans about how Obamacare has failed them. I’m listening to Iowans on the views on the current Senate draft and I’m reviewing the cost estimate from the Congressional Budget Office. It is important to understand that not acting is not an option or people will lose health care coverage.

No, Senator Grassley, the BCRA would not bring “immediate relief to the 72,000 Iowans on Obamacare.” Tens of thousands who are older or have pre-existing conditions could be priced out of the individual market. Just ask insurance industry leaders.