Advocates of the House Republican bill to repeal the Affordable Care Act (ACA) have argued that its new provisions simply let states make their own choices about protecting people with pre-existing conditions and essential health benefits. In practice, as we’ve explained, the amended bill would pressure states to roll back these protections and return us to pre-ACA days when states could choose to protect people with pre-existing conditions — but overwhelmingly did not.
Now, President Trump has doubled down on his promise to let insurers sell across state lines. At that point, if even just one state waived pre-existing conditions protections, those protections would be eliminated nationwide.
On Sunday’s “Face the Nation,” the President said, “[w]e’re taking across all of the borders or the lines so that insurance companies can compete … nationwide.” When challenged that this provision isn’t in the House Republican plan, Trump promised that lawmakers would push it very quickly in a later legislative vehicle – a “second phase, which will get approved, which will quickly get approved.”
President Trump’s proposal, coupled with the current House bill, would effectively prevent states from enforcing their own standards. Even if one state wanted to keep prohibiting insurers from charging people with pre-existing conditions more, those protections would be meaningless if other states’ competing plans that aren’t subject to those rules were on the market. Realistically, healthy people would only buy insurance from out-of-state insurers who could charge them less due to their better health status, while people with pre-existing conditions and those in poorer health would stay in the in-state insurance market. That would cause the in-state insurance market to become more and more unaffordable and risk falling into a “death spiral” — attracting only the very sick, which would make them increasingly expensive, or disappearing altogether.
Likewise, even if a state required plans originating in that state to cover maternity care or mental health benefits, out-of-state insurers could offer bare-bones plans without those benefits that would be more attractive to people who didn’t need that coverage. As a result, for example, only women would buy in-state plans that offered maternity care or patients with chronic illnesses would buy plans that offered prescription drug coverage, and they would have to pay more to do so — if they could afford those plans — regardless of state law.
That would create a national market where states couldn’t meaningfully protect people with pre-existing conditions — and people with those conditions would have no choice but to pay much more if they wanted to get insurance, presuming they could buy insurance that met their needs at all.
Letting insurers sell across state lines would only exacerbate the existing Republican bill’s problems. Even without allowing them to do so, the promise of “state flexibility” is a return to the pre-ACA individual market. Letting states choose whether to permit insurers to charge people with pre-existing conditions more is nothing new; states could do that before the ACA.
And, back then, 43 states plus Washington, D.C. let insurers charge people more based on their medical history and, even in the other seven states, benefit standards were much weaker — allowing many plans to exclude coverage for benefits like maternity care and mental health services. That’s because states couldn’t enact these protections without risking destabilizing their market and causing premiums to rise. And with the House Republican bill’s elimination of the individual mandate that people have coverage or pay a penalty, along with deep cuts in subsidies to help them buy coverage, states would face severe market pressures to seek federal waivers to return to the pre-ACA rules.
President Trump’s proposed “second phase” policies would make the situation even more extreme: no state could realistically keep any pre-existing conditions protection or benefit standard if any other state wanted to drop it.