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POLICY INSIGHT
BEYOND THE NUMBERS

GOP’s Health Agenda Would Undercut Their Vow to Let States Set Essential Health Benefits

Republicans argue that repealing the ten “essential health benefits” that the Affordable Care Act (ACA) requires every health plan to cover would simply allow states to make their own choices about what benefits to require. In practice, as we’ve explained, the House GOP health care bill would return us to the days before the ACA, when millions of Americans lacked access to plans that covered the benefits they needed and provided real security against medical bankruptcy. Moreover, President Trump’s promise to work for legislation allowing insurers to sell plans across state lines, even if the plans don’t comply with the other states’ consumer protections, makes clear that he doesn’t believe in allowing states to set their own benefit standards – and will try to make sure they can’t.

The promise of “state flexibility” is just a return to the pre-ACA status quo. Supporters of the House bill imply that devolving benefit requirement decisions to the states constitutes an innovation. But we already know what that sort of health insurance market looks like—the pre-ACA market, when states set their own benefit standards. Among people in the individual market in 2011, three years before the ACA’s essential benefit requirement took effect in 2014:

  • 62 percent had plans that didn’t cover maternity care;
  • 34 percent had plans that didn’t cover substance use treatment;
  • 18 percent had plans that didn’t cover mental health; and
  • 9 percent had plans that didn’t cover prescription drugs.

More broadly, eliminating the essential health benefits requirement would mean a return to a marketplace where people with pre-existing conditions couldn’t access insurance that covered the services they need, where women had to pay more than men for coverage, and where the lack of effective limits on consumers’ out-of-pocket costs meant that a medical catastrophe could result in financial catastrophe.

President Trump’s promise to allow insurers to sell across state lines would prevent states from setting their own benefits. When asked this morning what people could do if their state didn’t ensure that people had access to benefits like maternity care, Office of Management and Budget director Mick Mulvaney said: “Then you can figure out a way to change the state you live in.” But President Trump says he wants to allow insurers to sell plans across state lines, writing on Twitter earlier this month, “Don't worry, getting rid of state lines, which will promote competition, will be in phase 2 & 3 of healthcare rollout.” That would effectively prevent states from enforcing their own standards.

For example, even if a state decided to require plans originating in that state to cover maternity care, out-of-state insurers could still offer plans without maternity care – which would therefore be less expensive and almost certainly more attractive to men, who don’t need that coverage. As a result, only women would buy plans that covered maternity care, and they would have to pay much more to do so (making that coverage unaffordable for many), regardless of any state laws on the books.

In short, the Trump Administration and congressional Republicans are promising both to allow states to set their own benefit standards and to prevent those standards from having any real force by enabling out-of-state plans to undercut them.  That means any assurances that Americans will still be able to find the coverage they need ring hollow.