I have a theory about the Senate wrangling on health reform—Ted Cruz (R-Texas) is a closet single-payer fan. His amendment to the Senate reform bill might be the surest path to destabilizing the commercial insurance market and making single-payer a viable option for the U.S healthcare system.

The Cruz amendment—now part of the latest version of the Better Care Reconciliation Act, or BCRA—would create a two-level market, in which insurers could sell plans that do not meet ACA coverage requirements as long as they sell one plan design that meets ACA requirements.

The Senate debate over repealing, replacing, or papering over Obamacare is made frustrating by the additions made by people who don’t actually understand how insurance markets function.

There has been death spiral rhetoric around the Affordable Care Act since the fumbled launch of healthcare.gov in October 2013. The markets had a year or two of sure footing, but have stumbled ever since. As for a total collapse, it has not happened. The previous version of the BCRA offered a partial destabilization—this bill goes much farther.

You want a death spiral? Then the Cruz amendment is for you.

There’s no amount of objectivity that can rationalize this bill as good for the healthcare industry. If you are young and healthy, it could have some benefit thanks to reduced benefits. You can buy a policy with a low premium that covers basics and not much else. Those skinny plans will be cold comfort to a policyholder who breaks a bone or ends up in an ER-bound ambulance only to find out the plan doesn’t cover those maladies.

Today’s invincible millennial is tomorrow’s 40-something saddled with multiple chronic conditions. Everyone gets old, everyone gets sick. If you don’t have a pre-existing condition, just wait—someday you will. Today’s people with pre-existing conditions would be in their own risk pool because their conditions would force them to buy more comprehensive coverage. A pool of sick people with high claims is not sustainable.

Don’t believe that’s a problem? The Blue Cross Blue Shield Association and America’s Health Insurance Plans, the two largest health insurer lobbies, see the Cruz amendment as a major problem. A coalition of Medicaid MCOs have already come out against the BCRA, since the Medicaid funding caps could drive managed Medicaid insurers from their respective state programs.

Other changes to the commercial market have also drawn fire. Association health plans, which would allow individuals and small groups to band together to purchase insurance, sound good in principle. But if they harbor no loftier goal than syphoning healthy people out of the small-group market and leaving a less healthy and costlier small-group risk pool, it’s hard to see any merit. Don’t want to take my word for it? The National Association of Health Commissioners has come out against the BCRA language, saying it would result in higher premiums and reduced coverage choices.

Ultimately the bills miss the point of the ACA, which married popular provisions (ending exclusions for people with pre-existing conditions) with unpopular ones (the individual mandate).

The Cruz amendment might make the bill more palatable for some conservative senators, but it won’t sway any moderates since Medicaid still takes a mighty blow. The program would still have annual funding caps, although the new version would allow states to cover the ACA Medicaid expansion population under the block grant. Still, it’s likely that millions would lose Medicaid coverage.

It might not be the last bill to emerge. Sen. Lindsay Graham (R-S.C.) has crafted a compromise bill intended to draw votes from Democrats, who uniformly oppose the BCRA. If the latest version of the BCRA fails, it could emerge as a viable option.

But this bill won’t sway public opinion or the bulk of the healthcare industry.


Follow Bill Melville @BillMelvilleDRG


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