Senate consumer choice idea could raise premiums for sick
But critics including the insurance industry say it would split the sick and the healthy, leading to unsustainably high premiums for people with medical problems and pre-existing conditions, who may get priced out of the market unless taxpayers bail them out.
Senate Republican leaders trying to resolve differences between moderates and conservatives ahead of a health care showdown are taking a close look at the proposal from Sens.
A health care factoid can help frame the issue:
The Cruz-Lee proposal would affect people who buy individual health insurance policies, not those covered by employers. Under current law — the 2010 overhaul passed by former President
The Cruz-Lee amendment would technically leave in place Obama-era insurance rules and consumer protections. But it would also allow insurers to offer plans that don't follow those rules, provided the insurer also sells a plan that complies. Insurers could offer plans with reduced benefits, no maternity coverage, for example.
Cruz says his approach can bring down premiums for most people, delivering on a core promise by
"You the consumer, you the patient, should have the freedom to choose the insurance you want," Cruz said recently on
Several conservative groups said Wednesday the Cruz-Lee option must be included for the
But critics say the plan would siphon premium dollars paid by healthy people out of the insurance pool that covers the sick. Premiums for those who need comprehensive coverage would shoot up. The two main insurance industry lobbying groups,
"You have the possibility of two different risk pools," explained economist
A former Obama administration official agrees that the Cruz-Lee idea could create new problems. Insurance expert
"When you create an uneven playing field in health insurance regulation, you create instability," said Pollitz. "People who need (comprehensive) benefits go to those policies, which become more expensive. People who think they can live without those protections go to the cheaper policies and take with them their premium dollars."
Cruz says that doesn't have to happen. Both the
The insurance industry says the Cruz-Lee approach is bad policy. "The 'Consumer Freedom Option' is unworkable as it would undermine pre-existing condition protections, increase premiums and destabilize the market," BlueCross BlueShield President
Senate Republican leaders plan to unveil their revised bill on Thursday, with the goal of holding a vote next week on legislation that would roll back much of the Obama-era health law.
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