Healthcare continues to be a controversial issue in American politics, and now legislators are at odds about the potential impact of the American Health Care Act. The AHCA, a.k.a. Trumpcare, is the proposal to repeal and replace the Affordable Care Act, more widely known as Obamacare. Trumpcare has been passed by the U.S. House of Representatives and is currently under consideration by the U.S. Senate.
Trumpcare would make fundamental changes to many aspects of Obamacare, including rolling back Medicaid expansions. One of the biggest changes, however, is that the current proposal allows states to request a waiver from some protections Obamacare put into place. Under Trumpcare, states could request a waiver from Obamacare's rule prohibiting insurers from charging higher premiums to people with pre-existing conditions. But states could also request another waiver allowing them to modify Obamacare's mandate regarding essential health benefits (EHBs).
The modification of rules regarding EHBs could affect everyone in the insurance market, not just those with pre-existing conditions. And changes to EHBs could actually happen even if Trumpcare doesn't pass at all, or doesn't pass in its current form. This is why it's so important to understand exactly what "essential health benefits" are and why their coverage is at risk.
What are essential health benefits?
Before Obamacare, many insurance buyers on the individual marketplace purchased bare-bones insurance coverage that paid for few services. Of the individuals and families who purchased coverage on the individual market, 62% had no coverage for maternity services, 34% did not have coverage for substance-abuse treatment, 18% had no coverage for mental health services, and 9% had no coverage for prescription medications.
To ensure people had the coverage they required, Obamacare mandated that every insurance policy cover 10 services for policyholders. These were defined as "essential health benefits":
- Emergency care services
- Ambulatory patient services (outpatient care)
- Maternity and newborn care
- Mental health and substance-abuse services
- Prescription medications
- Rehabilitation services, including medical devices
- Laboratory services
- Wellness and preventative care, including help managing chronic diseases
- Pediatric care, including dental and vision care for children
Obamacare critics argue that mandating coverage for these 10 essential benefits drove insurance premiums up and prevented people from choosing the coverage they wanted. Obamacare supporters argue that guaranteeing basic coverage is vital to ensuring individuals and families can receive the care they require.
What does Trumpcare do to coverage for essential health benefits?
EHBs have long been a target of criticism from Republicans, with some GOP leaders attacking the requirement that men must pay for maternity coverage. If EHBs are no longer required, insurers in waiver states will be allowed to sell policies providing no coverage for maternity care, or for some or all of the other essential services that Obamacare mandated.
The Trumpcare provision allowing states to request a waiver from EHBs was added to the bill by the MacArthur-Meadows Amendment. This amendment was key to securing votes for Trumpcare from the House Freedom Caucus, an influential group of more than 30 Republican members of Congress. The Amendment is also supported by powerful outside groups, including Heritage Action for America, which has described Obamacare's mandate on essential health benefits as "one of the most harmful parts of Obamacare."
While Trumpcare is being substantially rewritten in the U.S. Senate, House Freedom Caucus chairman Mark Meadows, who co-authored the MacArthur-Meadows Amendment, is working with Senate Republicans to ensure that the Senate's version of Trumpcare doesn't abandon the revisions that made the bill palatable to hardline conservatives whose votes are necessary to pass the final legislation. These changes include allowing states to request EHB waivers.
One proposal would permit insurers to sell plans without EHBs, as long as they offered at least four compliant plans. But the compliant plans could be prohibitively expensive, and insurers could push low-cost coverage for healthy consumers while pricing people who need more services out of the market. While this is just one proposal, the criticism surrounding coverage mandates indicates that any final legislation is likely to include some changes to EHB rules.
Will states actually ask for waivers?
There is a very real possibility that numerous states will request waivers from EHB mandates if permitted to do so -- and not just the states you would expect.
State GOP lawmakers have already expressed support for Trumpcare's waiver provisions, including the chairman of the Florida House healthcare appropriations committee, who praised the flexibility to replace EHB requirements with a state-level plan.
Blue states may also be forced to abandon Obamacare's EHB requirements to reduce costs. "States are going to be under enormous pressure to apply for these waivers," warned Sabrina Corlette, a research professor at Georgetown University's Center on Health Insurance Reforms.
Is coverage for essential benefits safe if Trumpcare doesn't pass?
Trumpcare's future is uncertain, but policyholders with individual insurance coverage cannot assume they're guaranteed continued coverage for essential health benefits, even if the law fails to advance.
Tom Price, secretary of the Department of Health and Human Services (HHS), could use a federal rulemaking process to change the definition of "essential health benefit." Obamacare vested substantial authority in HHS to administer the program, and while the rulemaking process is time-consuming, it is within Price's power to make modifications -- including redefining what constitutes an essential health benefit.
What does this mean for policyholders?
If mandated coverage for EHBs is rescinded by a new HHS rule or by some form of Trumpcare, policyholders will need to shop carefully for coverage. Those who buy policies on the individual market will no longer be able to assume that every policy provides essential services. Reading individual coverage rules will be vital.
Policyholders will also have a significant choice to make: pay more for comprehensive policies or obtain bare-bones coverage that comes with lower premiums. Doing the math on the costs of care will help consumers find the best plan in terms of both premiums and ongoing healthcare expenses.
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