Monday, May 29, 2017

CBO flips off the Upton Amendment to the AHCA

The CBO report on the amended AHCA that passed the House expends considerable ink on the malign effects of the MacArthur amendments that won over the Freedom Caucus. Those amendments allowed states to opt out of ACA regulations banning medical underwriting and mandating that all qualified health plans cover ten Essential Health Benefits.   CBO forecast that states encompassing one sixth of the U.S. population would  fully embrace the opt-out -- and that in those states, guaranteed issue would effectively end, and services removed from EHBs such as maternity care would become prohibitively expensive. The individual market in these states would  thus become unstable, according to CBO.

When the MacArthur amendment became part of the AHCA, many Republican moderates anticipated such results and announced that they could not support the legislation because it did not adequately protect people with pre-existing conditions. A critical mass flipped back, however, when Fred Upton -- one of those who said he could not support the bill with the MacArthur amendment -- introduced an amendment allocating a mere $8 billion over 10 years for states to use to lower premiums for those harmed by the return of medical underwriting.  While that amendment was widely derided as a band-aid on a gunshot wound, Upton issued a statement declaring it sufficient:
“This week, I expressed my deep concerns with the AHCA as it was written to both President Trump and our leadership. We immediately got to work on a responsible fix.

“This amendment would provide additional funding, $8 billion over five years, to ensure a strong safety net and reduce premiums, or other out-of-pocket costs, for those with pre-existing conditions.”

“Obamacare is just not working for so many Americans. I’ve been on the record for many years in favor of repealing and replacing Obamacare with responsible solutions that improve affordability and access while protecting those with pre-existing conditions. I believe that with this new funding in place, we keep our promise to those with pre-existing conditions.”
While CBO devotes about 10 pages to discussion of the effects of the MacArthur Amendment, the report effectively flips off the Upton Amendment in one paragraph:
Although CBO and JCT expect that federal funding would have the intended effect of lowering premiums and out-of-pocket payments to some extent, its effect on community rated premiums would be small because the funding would not be sufficient to substantially reduce the large increases in premiums for high-cost enrollees. To evaluate the potential effect of the $8 billion fund, looking back at the high-risk pool program funded by the ACA prior to 2014 is useful. Within two years, the combined enrollment of about 100,000 enrollees in that program resulted in federal spending of close to $2.5 billion.
Thus CBO pretty much ratified the widespread conclusion that those who flipped their vote to yes because of the Upton amendment don't give a fig about protecting those with pre-existing condition -- they settled instead for a fig leaf.

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