As Republicans scramble to find enough Senate votes to keep their health care reform effort alive, there are reports that the most current draft of the bill will contain a provision written by Mike Lee (R-Utah) and Ted Cruz (R-Texas) that is popular with conservatives. Axios cites three sources familiar with the bill who say that the proposal of the two conservatives to allow a liberalization of health policy requirements is part of the bill at least for the time being.
Under the Consumer Freedom Protection option, health insurance companies that sell policies that are compliant with the requirements of the Affordable Care Act will be allowed to sell noncompliant policies as well. The ability to buy noncompliant policies should help consumers find lower cost health insurance.
The ACA mandates “essential health benefits” that must be included in health insurance policies. These requirements often include coverages that consumers may not want, need or can afford. The requirement to provide these coverages in all plans drives up costs and puts insurance out of reach for many consumers.
Critics of the provision say that healthy consumers will choose the lower cost noncompliant plans while those who are sick will likely buy the more expensive compliant plans. They argue that this will contribute to the death cycle of Obamacare and raise the cost of insurance for people with pre-existing conditions. These costs would be passed along to the federal government through insurance subsidies.
Over the past few months, the GOP reform effort has been losing support from both the center and the right. Republican moderates oppose the bill because of its phase out of the Medicaid expansion while conservatives argue that the bill does not go far enough in repealing and replacing Obamacare. Inclusion of the Cruz-Lee provision may have the effect of winning back the votes of some members of the conservative wing of the party.
The Axios report also gives several other details about the current version of the bill. The new version increases the amount of money for states to stabilize their health markets and cover pre-existing condition to more than $170 billion. It also keeps two of the Obamacare tax increases on wealthy families. Other new provisions allow consumers to pay insurance premiums with money from health savings accounts that receives favorable tax treatment and allow people receiving ACA insurance subsidies to buy lower cost insurance policies that provide only catastrophic coverage.
The laws of supply and demand dictate that as prices fall, demand will increase as more people can afford the product. As the price of health insurance decreases, more people will decide that insurance protection is worth the cost.