What Liberals Won’t Tell You About Pre-Existing Conditions

The Kaiser Family Foundation released its monthly tracking survey on Wednesday, with results designed to give liberals a big boost: “The majority of people in a new poll say it’s important to them that Obamacare’s protections for people with pre-existing conditions aren’t endangered.”

Unfortunately, that doesn’t tell the entire story. Voters do like the idea of “protections for people with pre-existing conditions” in the abstract. But when pressed, they express significant qualms about the very real trade-offs.

Moreover, large majorities of voters said it was “very important” to retain provisions “prohibiting health insurance companies from denying coverage because of a person’s medical history” (76 percent) and “charging sick people more” (72 percent). Smaller but still sizable majorities of Republicans (58 percent in both cases) supported each issue.

What the Poll Did Not Ask

The poll looked at views about pre-existing conditions in a vacuum and did not attempt to examine trade-offs of the policy, or whether individuals valued one policy over another. For instance, among Republicans, repealing Obamacare proved more popular than preserving the pre-existing condition provisions.

Nine percent of Republicans considered Obamacare repeal the “single most important factor” in their vote, with another 49 percent calling it a “very important factor.” Compared to that combined 58 percent support, pre-existing condition provisions won 51 percent support, with 8 percent calling them the most important factor, and 43 percent calling them very important.

Kaiser also did not ask any questions about the trade-offs associated with the pre-existing condition provisions, and whether those trade-offs would soften voters’ support for them, even though it has done so on other issues in the past. Last July, a Kaiser poll demonstrated how telling people who initially support a single-payer system that such a change could lead to higher taxes or greater government control caused support for single-payer to drop by roughly 20 percentage points:

Thankfully, last year the Cato Institute conducted a survey that did examine the trade-offs of the pre-existing condition provisions, with revealing results:

  • Initially, voters approved of “requir[ing] insurance companies [to] cover anyone who applies for health insurance, including those who have a pre-existing medical condition” by a whopping 77-20 percent margin.
  • But when asked if they would approve of such a requirement “if it caused the cost of your health insurance to go up,” voters disapproved of this provision by a 35-60 percent margin. If the pre-existing condition provisions raised premiums, support declined by 42 percentage points, and opposition rose by 40 percentage points.
  • Voters likewise initially approved of the Obamacare provision “that prohibits health insurance companies from charging some customers higher premiums based on pre-existing conditions” by a 63-33 percent margin.
  • Here again, however, if charging all individuals the same rates meant “the cost of your health insurance would go up,” support dropped by 24 points (from 63 percent to 39 percent), while opposition rose by 22 points (from 33 percent to 55 percent). Opposition also rose dramatically if voters thought the pre-existing condition provisions would cause taxes to rise, or the quality of care provided to decrease.

Is This Merely Biased Polling?

I asked Kaiser why they included these types of “malleability” questions regarding single-payer but not pre-existing conditions. Ashley Kirzinger, a Kaiser researcher who worked on the poll, said they were gauging general public responses on the issue. She said Kaiser might study the trade-offs associated with the pre-existing condition policy in the future, but didn’t definitively commit to doing so.

That said, a conservative might highlight Kaiser’s liberal ideology as another possible explanation why they might not ask voters whether they would support Obamacare’s pre-existing condition provisions despite costly trade-offs. For instance, the organization has consistently used the phrase “Affordable Care Act” rather than “Obamacare” to describe the 2010 health care law—and as even a supporter of the law like Jimmy Kimmel found out, the two terms prompt sharply different reactions.

Here’s the Bottom Line

Conservatives have a compelling case to make on the harm that Obamacare’s pre-existing condition provisions have wrought—if they have the courage to make it. Thankfully, politicians like Sen. Ted Cruz (R-TX) are doing so, and in the unlikeliest of places: a pickup charity basketball game with Jimmy Kimmel.

Conservatives do have other alternatives to Obamacare’s premium-raising requirements that address individuals with pre-existing conditions. For instance, they could revive and reform high-risk pools in place prior to the law. The Heritage Foundation last year proposed regulatory changes to provide continuity of coverage for people with pre-existing conditions. While the Heritage proposal has its flaws, it would likely work better than Obamacare currently does, thereby lowering premiums in the process.

But to advance these other proposals, conservatives must first make the argument that the status quo on pre-existing conditions amounts to a tax increase on millions of Americans who buy individual health insurance. They have the facts on their side—and Kaiser’s incomplete survey notwithstanding, those facts may bring the American people to their side as well.

This post was originally published at The Federalist.

What You Need to Know about the Proposed Short-Term Plans Rule

On Tuesday morning, the Trump administration issued a proposed rule regarding short-term health insurance plans. The action represents the second prong of the Trump administration’s strategy, outlined in last October’s executive order, to offer regulatory relief to insurance markets. The Department of Labor acted on the first prong, issuing a proposed rule expanding access to association health plans, in January.

As I noted in October, the Obama administration issued a rule in October 2016 designed to limit short-term plans. The Public Health Service Act specifically exempts “short-term, limited-duration insurance” from the definition of “individual health insurance coverage,” exempting such plans from all of Obamacare’s new, federally imposed regulatory regime (though they are regulated by states).

The Trump Administration’s Proposal

The Trump administration’s proposed rule would revise the disclosure slightly (in part to reflect the repeal of Obamacare’s individual mandate, set to take effect in January 2019), and restore the prior definition of short-term coverage to “less than 12 months.”

The proposed rule also requests comment on the ways to facilitate streamlined renewal of short-term plans. As I noted in an article last year, limiting individuals’ ability to renew policies harmed people who develop illnesses while on short-term plans:

Jimmy Kimmel forgot to mention it, but prohibiting coverage renewals harms individuals with pre-existing conditions, because it forbids customers who develop a pre-existing condition while on short-term plans from continuing their coverage. In discouraging these short-term plans, the Obama administration preferred individuals going without coverage entirely over seeing anyone purchase a policy lacking the full panoply of ‘government-approved’ benefits.

The Trump administration can and should rescind this coercive rule and its perverse consequences immediately.

Effective Dates and Impact

The administration estimates that the proposed rule would lead only about 100,000-200,000 individuals to switch from individual coverage to short-term plans, only about 10 percent of whom would have qualified for Obamacare insurance subsidies on exchanges. The administration also estimates the rule would raise spending on premium subsidies by $96-168 million annually. Because the individuals shifting to short-term coverage would be younger and healthier than average, they would slightly increase premiums, and thus premium subsidies, on the insurance exchanges.

However, these comparatively modest estimates on both the coverage and cost fronts suggest that short-term plans may have less of an impact than conservatives had hoped—or liberals have feared. Time will tell if the predictions prove an over-estimate or under-estimate; perhaps more definitive actions to allow for the guaranteed renewal of short-term coverage will increase their popularity.

What Should Be the Next Steps?

Now that it has proposed this rule, the administration should take regulatory action on another front, by stopping a movement in Idaho to offer non-compliant health plans. Last month, the state’s insurance department offered guidance to insurers about new coverage offerings. The new plans could:

  • Impose limits on pre-existing conditions for individuals without continuous coverage;
  • Limit benefits provided to $1 million annually;
  • Not offer maternity care in all cases (although each carrier must sell one plan with maternity coverage); and
  • Charge older individuals up to five times as much as younger individuals when calculating premium rates.

But the Idaho guidance hints at one big problem. It instructs insurers selling the plans in question to disclose to consumers that “This policy is not fully compliant with federal health insurance requirements.”

Therefore, as a matter of law, I cannot support the Idaho effort, not because I support or want to sustain Obamacare—I don’t—but because I support and want to sustain the rule of law, which is more important than any single piece of legislation. Unfortunately in this instance, federal law supersedes state law, which means the federal law must prevail.

I wrote in January 2017 that the Trump administration had an obligation to enforce the individual mandate. Likewise here, the administration has an obligation to enforce the Obamacare statute, and either redirect Idaho’s efforts to bring them into compliance with the law—perhaps through a Section 1332 innovation waiver, although that waiver may not bring the state sufficient flexibility—or quash them. The administration has a constitutional obligation to “take care that the laws be faithfully executed,” and it should not follow the Obama administration’s example of picking and choosing which laws it wishes to enforce.

Better yet, Congress can and should repeal the regulations that represent the beating heart of Obamacare. They have a roadmap to do so, even with a slim Senate majority. Such action would allow Idaho, and 49 other states, to innovate to their heart’s content to provide more affordable coverage to their residents—an outcome consistent with the rule of law, and federalism, that conservatives could embrace whole-heartedly.

This post was originally published at The Federalist.

What to Do on Obamacare Now

The collapse of legislation proposed by senators Lindsay Graham (R-SC) and Bill Cassidy (R-LA), coupled with the near-simultaneous resignation of Health and Human Services Secretary Tom Price, presents a turning point in this year’s health-care debate. Given the dual disappointments, policymakers and voters looking for long-delayed progress may wonder whether, and what, conservatives can do to restore patient freedom to health-care markets.

Congress still retains procedural options to continue legislatively dismantling Obamacare. In the interim, the executive can seize important regulatory opportunities to lower premiums for millions of Americans—and it appears President Trump is finally doing just that. Press reports over the weekend suggest the administration is preparing to revoke Obama administration regulations sharply limiting the sale of short-term health insurance plans.

What Is Short-Term Health Insurance?

The short-term plan regulations, finalized by the Obama administration one week before last year’s election, demonstrate how liberals hope “consumer protections” protect individuals from becoming consumers. Administration officials expressed “concern” that the policies have “significant limitations”—for instance, Obamacare’s essential health benefits requirements do not apply to short-term coverage—and “may not provide meaningful health coverage.” As a result, bureaucrats prohibited short-term plans from exceeding 90 days in duration, and banned carriers from automatically renewing such coverage.

Jimmy Kimmel forgot to mention it, but prohibiting coverage renewals harms individuals with pre-existing conditions, because it forbids customers who develop a pre-existing condition while on short-term plans from continuing their coverage. In discouraging these short-term plans, the Obama administration preferred individuals going without coverage entirely over seeing anyone purchase a policy lacking the full panoply of “government-approved” benefits. The Trump administration can and should rescind this coercive rule and its perverse consequences immediately.

What Else the Trump Administration Can Do

Upon completing regulatory action to return to the status quo ante on short-term plans, the administration can take action it should have taken months ago: Restoring constitutional order by stopping the unilateral payment of cost-sharing reduction subsidies to insurers. Congress could also repeal the individual mandate penalty, allowing those who wish to purchase non-compliant short-term plans rather than taxing them for not buying costly Obamacare coverage.

Obamacare advocates may complain that this series of actions would bifurcate insurance markets—a reasonable assumption. The exchanges would likely morph into something approaching a high-risk pool, with federal subsidies available to cover the cost of more expensive insurance for individuals with pre-existing conditions. Meanwhile, other individuals would have more, and more affordable, options.

That said, executive action should not prompt Congress to walk away from attempts to reform health care (or vice versa, for that matter). Whether through reconciliation instructions in the fiscal year 2018 budget this fall, the fiscal year 2019 budget next year, or other means, Congress should keep searching for opportunities to return patient-centered forces to health care, and provide needed relief from skyrocketing premiums.

When they next face voters, both President Trump and Republicans in Congress should prepare to tell them they did everything they could to fulfill their eight-year promise to repeal and replace Obamacare. They have much work yet to do to make such a claim credibly. Following the setback on Graham-Cassidy, they should roll up their sleeves and do just that.

This post was originally published at The Federalist.