New 8 Billion For Those With Preexisting Conditions Appears to Boost AHCA Critics Say Amount Is To Low

On May 3, 2017, the House of Representatives may have broken the gridlock that has prevented its passage of Republican changes to the Affordable Care Act. Representative Fred Upton (R MI) and six other moderate Republicans offered what they viewed as a corrective amendment (summary) to the MacArthur-Meadows amendment to the American Health Care Act (AHCA). MacArthur-Meadows, offered to secure the votes of conservative Republican members of the House Freedom Caucus, authorized states to obtain waivers to permit their insurers to charge higher rates based on health status to individuals with preexisting conditions for a period of about a year if those individuals let their insurance coverage lapse for a period of at least 63 days.

The House appears set to vote on the AHCA on May 4, without waiting for a new score from the Congressional Budget Office.

The Upton amendment would create a fund of $8 billion for the years 2018 to 2023. The money would go to states that permit insurers to charge higher health-underwritten premiums to such individuals; the funds would be used to provide “assistance to reduce premiums or other out-of-pocket costs of individuals who are subject to an increase in the monthly premium rate for health insurance coverage as a result of such waiver.” The funds would be apportioned to the states taking into account other stabilization fund grants.

The amendment has been described as funding state high-risk pools. A state could certainly use its share of the $8 billion to fund risk pools as one approach to making coverage affordable to persons subject to high premiums because of their health status. But the money could also be used to directly subsidize the premiums or cost-sharing that high-cost consumers might have to pay for commercial insurance.

Others have commented that $8 billion falls well short of the amount needed to adequately ensure coverage to high-risk consumers and have additionally noted the problems that have plagued high-risk pools in the past. There is also the question of a strategy that allows insurers to up-rate people who do not maintain continuous coverage, purportedly to discourage breaks in coverage, but then seeks to cover the cost of the penalty when the consumer seeks insurance again after the coverage break.

In any event, the Upton amendment is likely to be added to the AHCA as it currently exists on May 4 and may bring in enough votes to secure passage in the House of the bill. The fate of the AHCA in the Senate, however, is a whole another matter, as the Senate operates on different procedural rules that may well block a number of parts of the AHCA and with a much smaller, and quite diverse, Republican majority.