Focus on lower premiums may undermine benefits
WASHINGTON — Republicans trying to repeal and replace former President Barack Obama’s health care law are grappling with a hard lesson that vexed him: Quality health insurance isn’t cheap, especially if it protects people in poor health, older adults not yet eligible for Medicare, and the poor.
Something has to give. Now, the GOP’s laser focus on lowering premiums could undermine comprehensive coverage, such as the current guarantees that people with medical problems can get health insurance, or that plans will cover costly conditions such as substance abuse.
Consumers value comprehensive coverage, since no one is beyond the reach of sickness, or immune from the consequences of age.
“Premiums do not tell the whole story,” said Trish Riley, executive director of the National Academy for State Health Policy, a nonpartisan organization that advises states.
“The questions that need to be addressed are what do those premiums buy, and what other costs besides premiums do consumers pay?” said Riley. “If you buy a bike it will cost you less than a car.”
With “Obamacare,” Democrats set out to get more people insured, but they also wanted to bolster the underlying coverage. They required insurers to accept those with medical problems, prescribed a broad range of standard benefits, and established baseline financial protections. Previously, for example, people with a history of cancer could be charged a higher premium, or be turned down altogether.
That led to 20 million more insured, but also higher premiums for people buying their own policies, along with tax increases and considerable federal regulation.
Republicans trying to roll back the 2010 health care law have made their case all about premiums, trying to find ways to give states and insurers flexibility to design plans that cost less. About half the people who buy individual health insurance policies are subsidized under Obama’s health law, but the rest are not, and many have faced stiff premium increases.
The old saying about getting what you pay for still applies.
Although many healthy customers would welcome plans with lower monthly premiums, the high cost of medical care isn’t going down. The easy way for insurers to reduce premiums is by covering less.
A nonpartisan analysis of the House-passed Republican bill said the potential consequences could be severe. The Congressional Budget Office said that in states that take full advantage of the House plan’s waivers to insurance requirements, healthy people might flock to skinnier, lower-premium plans. Those in poor health left in comprehensive plans could face premiums that keep rising until they become unaffordable, because there would be fewer healthy people in those plans to share the cost.
“People who are less healthy (including those with pre-existing or newly acquired medical conditions) would ultimately be unable to purchase comprehensive … health insurance at premiums comparable to those under current law, if they could purchase it at all,” said the CBO report.
Some Republicans, including Sen. Bill Cassidy of Louisiana, said they don’t want that. But many still want to talk just about premiums. The CBO report did find that over time premiums would come down under the House bill, even if more people become uninsured.
“We want to focus on premiums, which is what I hear about every weekend,” said Sen. John Barrasso, R-Wyo., who can recite personal stories of constituents slammed with big increases.
Republicans may have a touch of tunnel vision, suggests Robert Blendon, who follows the politics of health care at the Harvard T.H. Chan School of Public Health.
“In 2016, the political ads they ran were all about rising premiums,” said Blendon. “When they run in 2018, they are going to want to say that they lowered average premiums. That may be very hard to do without having it be obvious that they are reducing the level of coverage for people.”
House Speaker Paul Ryan, R-Wis., used a Trump administration report on premiums as the centerpiece for a news conference.
“We see a law that’s collapsing,” said Ryan. “People can’t afford this.”
The administration report found that premiums more than doubled since “Obamacare” took effect, but independent experts say it’s not an apples-to-apples comparison. That’s because prior to the Obama law, insurers were able to turn away people with costly conditions, and offer plans that limited or left out benefits like maternity care and prescription drugs.
“The premium might be lower but there will be benefits missing,” said Gary Claxton, a vice president of the nonpartisan Kaiser Family Foundation, a clearinghouse for health system information.
With polls showing that only about 1 in 5 five Americans support the House bill, Republicans have many issues to resolve.
Even Ryan, one of the bill’s biggest cheerleaders, acknowledges that. “We got two problems we got to solve here,” he said later in his news conference. “We got to get premiums down and we got to make sure that people with pre-existing conditions can get affordable coverage.”