Yesterday, reports emerged that the White House and the Freedom Caucus have re-started negotiations on Obamacare repeal-and-replace after the GOP’s Affordable Health Care Act was pulled amid opposition from both the Tea Party and moderate wing of the party.
The Freedom Caucus is reportedly pushing for the elimination of two key Obamacare provisions: the requirement that insurers cover 10 essential health benefits, and the community rating provision, which requires insurers to set premiums based primarily on an applicant’s age and location (as opposed to her individual health status). The community rating provision was vital in helping people with pre-existing conditions to obtain affordable coverage after the ACA passed.
Prior to the ACA, insurance companies were free to both deny coverage to or charge very high premiums to those in the non-group market with pre-existing conditions. Under the ACA, insurers are not only required to offer coverage to those with pre-existing coverage, but are forbidden from charging those people more than their healthier peers. While people with pre-existing conditions might technically be able to purchase insurance without the community rating requirement, their premiums would skyrocket.
The White House and the Freedom Caucus are reportedly considering a deal that would allow states to opt out of these regulations. Here’s the Washington Post on how Mark Meadows, the chairman of the Freedom Caucus, described the deal:
The proposal, Meadows said, would allow states to apply for federal waivers exempting them from some health insurance mandates established under the Affordable Care Act — including “essential health benefits” requiring coverage of mental-health care, substance abuse treatment, maternity care, prescription drugs and more, as well as a provision that bars insurers from charging the sick more than the healthy.
It’s not clear if moderates will sign on to such a compromise. In the absence of significant government assistance for those with pre-existing conditions, the proposal would almost certainly result in large losses of coverage among the sick in states that opted out of the regulations. Meadows told reporters on Monday that those with prohibitively high premiums would be able to access insurance through subsidized high-risk pools, but those pools were riddled with problems in the pre-ACA years, and conservatives have historically balked at the funding necessary to adequately subsidize patients in the pools.
While the White House has downplayed the significance of the negotiations, a Freedom Party member told the Washington Examiner that he was “cautiously optimistic that we may be able to reach a path forward by week’s end.”