Health Law Daily Insurers dub Consumer Freedom Option unworkable, predict harm to consumers
Monday, July 17, 2017

Insurers dub Consumer Freedom Option unworkable, predict harm to consumers

By Sheila Lynch-Afryl, J.D., M.A.

Insurers criticized the "Consumer Freedom Option" of the Better Care Reconciliation Act (BCRA) (H.R. 1628) as "unworkable in any form" and urged the Senate to strike the option from the bill. According to a letter written by American’s Health Insurance Plans and the Blue Cross Blue Shield Association, the option, which was proposed by Senator Ted Cruz (R-TX), would undermine protections for those with preexisting conditions, increase premiums, and lead to widespread terminations of coverage for people currently enrolled in the individual market.

The BRCA, as revised by the Senate July 13, 2017 (see Cheaper plans, fewer benefits with revised Senate's ACA replacement bill, July 14, 2017), would allow insurers to sell products that must comply with all of the Affordable Care Act’s (ACA) (P.L. 111-148) rules in current law alongside plans that do not comply with current insurance reforms.

The insurers argued that as healthy people move to the less regulated plans, those with significant medical needs will be forced to stay in the comprehensive plans, and premiums will rise for people with preexisting conditions. The provision would also lead to far fewer coverage options for consumers who purchase their plan in the individual market, which would cause millions more individuals to become uninsured.

Similarly, the Kaiser Family Foundation concluded that the amendment would cause ACA-compliant plan premiums to skyrocket and premiums to be higher for an estimated 1.5 million people with pre-existing conditions.

The insurers refuted that a single risk pool and additional dedicated funding for high risk individuals will make the option work, as it "establishes a ‘single risk pool’ in name only." To the contrary, they said, it creates two systems of insurance for healthy and sick people, which the American Academy of Actuaries confirmed.

Companies: American’s Health Insurance Plans; Blue Cross Blue Shield Association; Kaiser Family Foundation; American Academy of Actuaries

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