Previewing a House GOP Leaders’ Health Plan, #5: Market Rules and Consumer Protections

Any health plan from House GOP leaders would likely scrap much, if not all, of the Affordable Care Act’s (ACA) most popular feature: the market reforms that allow a broad array of people — including those with pre-existing conditions — to buy insurance that meets minimum coverage standards in the individual and small-group private health insurance markets.

These markets would effectively revert to pre-health reform rules, meaning insurers could once again:

• Deny coverage to applicants based on their health status (likely except for those who’ve maintained continuous coverage for a certain period).
• Retroactively cancel a person’s coverage (typically known as a “rescission”) after they use health care services.
• Charge higher premiums to people who have health conditions, are women, or for another reason such as their industry or profession.
• Charge even higher premiums to older people, who currently can’t be charged more than three times what younger adults are charged due to their age.
• Drop or severely limit benefits such as maternity care and prescription drugs, which they now must cover as “essential health benefits.”
• Reinstate annual and lifetime limits on their reimbursements on behalf of an enrollee.
• Charge deductibles, co-insurance, and copayments without limits — in contrast to the ACA’s limit on annual out-of-pocket spending that protects people from excessive costs for all individual market, small group market, and large group/self-insured employer plans.
• Spend a smaller share of their premiums on medical care and improving health care quality — in contrast to the ACA’s “medical loss ratio” rule that requires individual-market insurers, for example, to spend at least 80 percent of what they collect in premiums on medical care.

This list is far from comprehensive.  (Click here for the full list of ACA market reforms.)  While a health plan from House GOP leaders would likely stress that states could retain some of the ACA’s consumer protections, that was true before the ACA and few did.  That’s because instituting these reforms without also requiring people to have health insurance or pay a penalty and providing sufficient subsidies to make coverage affordable — as the ACA does — would raise premiums and destabilize insurance markets.   

In short, turning the clock back to pre-ACA insurance market rules would mean a return for many Americans, particularly those with pre-existing conditions, to harmful insurer practices and large gaps in coverage within highly flawed, poorly functioning individual and small-group markets.

Read the rest of our series previewing a House GOP leadership health plan here.