With a bloc of conservative lawmakers still holding out support for the House vote on the Affordable Health Care Act, the White House and Paul Ryan reportedly told conservatives they’d be willing to make some last-minute changes to the bill to win the necessary votes. Reportedly on the table are the Affordable Care Act’s essential health benefits — a group of 10 health benefits that the ACA required insurance plans to cover. Conservatives argue the essential health benefits requirement has driven up premiums and decreased consumer choice. These are the 10 benefits:
- Ambulatory patient services (outpatient care)
- Emergency room visits
- Maternity and newborn care
- Mental-health services and addiction treatment
- Prescription drugs
- Rehabilitative services and devices
- Laboratory services
- Preventive services
- Pediatric services
To find out what might happen to insurance coverage if the essential health benefits are indeed eliminated, we talked to Linda Blumberg, a senior fellow in the Health Policy Center at the Urban Institute (whose research we’ve covered before).
Obviously, the main argument in favor of eliminating the essential health benefits is that it would decrease premiums. Do you agree premiums would go down?
Oh yeah, you can make premiums very low if you don’t require any benefits be covered.
How do you think that insurers would respond to this change? Would there be more plans offered? What would the plans look like?
What we’re talking about is a move for all insurers to come down to offer much lower benefit plans. The issue is that an insurer who would offer something more comprehensive, something that looked like what was required under the ACA, would attract the enrollees who anticipated using more benefits and services. If you are the one insurer offering something more comprehensive, you’re going to attract the higher cost, or higher expected cost, individuals. That’s going to drive up your premiums, and that then drives out your enrollees who are not expecting to use as much.
So it is very difficult for an insurer to offer something comprehensive when others in the same market are offering something much less comprehensive.
And how does this compare to, for example, the non-group markets before the ACA?
This becomes a much more extreme situation than what we had prior to the ACA. And that’s because the AHCA requires that insurers issue a policy to all individuals, regardless of their health status. Prior to the ACA, someone who came with characteristics and history that looked like they were going to use significant health-care services could be denied outright by the insurer. So they had that tool available to them to protect themselves from high-need individuals. They don’t have that under the AHCA. So if they have to issue a policy and they’re not required to offer essential health benefits or any benefits whatsoever, then what happens is the insurer, in order to both protect themselves from adverse selection and the guaranteed issue requirement, they then will offer much less than they would have pre-ACA. And then when they do end up enrolling some sick people, their liability is very limited because what’s covered is very narrow. So it makes it even harder for a non-group insurer to offer something reasonably comprehensive than was the case prior to the ACA.
It eliminates choices in that it drives all the insurers down to low-value plans.
So you still have the mandate to cover people with pre-existing conditions but the plans available will be very limited and very expensive.
Well, they wouldn’t necessarily be expensive but they would be limited. So the premium would be low but it wouldn’t cover very much. If you ended up needing care, a very large share of those costs are going to come directly out of your pocket.
It is an incredibly hollow thing to say that we are going to protect people with their pre-existing condition and at the same time have no essential health benefit requirements because you can say “listen, you can’t deny me because of my cancer” but if a plan doesn’t have to cover my chemotherapy drugs, it doesn’t have to cover radiation, then what does that protection mean? It means nothing to me. So you can’t actually provide real protection for pre-existing conditions and have no essential health benefit requirements. It’s an empty promise.
To me, this looks like another thing that will hurt older patients since they need more comprehensive coverage.
It’s not just older adults; it’s anybody with a significant health problem. It’s going to be very, very difficult — if not impossible — to find a plan that covers prescription drugs. Maybe you’ll see some with just generic drugs covered, or maybe one or two prescriptions a year covered. But it’s going to be very difficult to find a plan that covers your chemotherapy drugs, your insulin. People with serious chronic illnesses that need infused drugs — those are not generic drugs. So if you have, at any age, significant health problems … forget about maternity coverage, speech therapy, occupational therapy, maybe physical therapy, substance abuse disorder treatment (unless they put that in there explicitly). Any of those kinds of issues can affect people at any age that have a health problem.
So this is maybe a great change for me if I’m a healthy adult in my thirties not planning on having any more kids … until the year that I get diagnosed with lupus, or one of my kids gets cancer.
You save on premiums, but the return is that the costs of obtaining care fall much, much more heavily on the people who need care. So basically you can save some money in the near term, but if you end up having a health-care need, and most of us do at some point or another, you could be unable to afford access to care that is necessary for you.
This interview has been edited for length and clarity.