With little movement toward an overall agreement on the American Health Care Act, the House GOP introduced an amendment Thursday for the AHCA to establish "invisible high-risk pools" to help cover people with preexisting conditions.
The amendment is aimed at foisting a public show of progress toward the repeal and replace of the Affordable Care Act, also known as Obamacare, while adding a popular Republican proposal to their healthcare legislation.
These "invisible" pools would operate similarly to Obamacare's reinsurance policies, which gave money to insurers to help lower premiums for the sickest people. In theory, this would help stabilize the individual insurance market for those without coverage through an employer or government program like Medicare.
However, high-risk pools have long been criticized for their hiccups, and the Republican amendment remains unclear on its specifics.
The amendment lays out funding for the pools but does not specify how states will qualify for the funding, how it will be apportioned, how enrollees will be determined, and more.
Instead, those details would be left up to the Centers of Medicare and Medicaid Services, a division of the Department of Health and Human Services that oversees many government insurance programs, including the Affordable Care Act's insurance exchanges.
Additionally, the funding allocated toward the invisible high-risk pools in the amendment could be inadequate. To mitigate costs to insurers from high-risk pools, since sicker people are more expensive and there are no healthy people to balance out the costs, the federal government would allocate funding to the states to distribute to insurers and patients to bring the costs down.
The GOP amendment would allocate $15 billion over a nine-year period until 2026 for states to establish high-risk pools, or roughly $1.67 billion annually. Based on most studies on high-risk pools, that number would fall well short of the amount needed to keep insurers in the market and keep costs down for enrollees.
Cynthia Cox, Associate Director at the Kaiser Family Foundation, told Business Insider that this funding would not be nearly enough compared to what would be needed to properly fund a pool of this type.
"I think an invisible high-risk pool or reinsurance could work so long as it's adequately funded, and this does not seem like a significant amount of money," Cox said.
"It is likely a drop in the bucket compared to what insurers would likely need to stabilize the market and to help convince them to stick around," she added.
The old reinsurance program under the ACA provided $20 billion in funding over three years for these funds, which still struggled to keep some costs under control even then.
Interestingly, when talking about the extension of the Obamacare reinsurance program, many Republican lawmakers called such funding a "bailout," as reported by Chris Jacobs, a conservative policy consultant who previously worked for then-Rep. Mike Pence during the original ACA debate.
"Congressional leadership previously called the $20 billion in Obamacare reinsurance funding a 'bailout' and 'corporate welfare,'" Jacobs wrote on Thursday. "But the $15 billion in funding under the proposed amendment echoes the Obamacare mechanism—only with more details missing and less oversight. Why do Republicans now support a program suspiciously similar to one that they previously opposed?"
By most estimations, the money set aside by the new amendment does not measure up, potentially leading to a massive number of the sickest people with either incredibly high costs in the pool, massive insurer losses, or sick people simply opting to go without insurance.
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