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Quality of Coverage

Consider QUALITY of Coverage in Repeal and Replace Debate

Wed, Jul 26, 2017  -  Comments (0)  -   Posted by Deanna Moore

It’s a bit of an understatement to say things are moving quickly in healthcare policy these days. In fact, by the time the thoughts that are in my brain are deposited into this blog post, I’m sure yet another new version of repeal and replace legislation will have been proposed. It’s hard to provide timely analysis at such a breakneck pace, but what I can say for certain is every version that has come out so far (the House version, the Senate version, the new Senate version and the new, new Senate version) has had drastic negative repercussions for hospitals and the patients they serve. Loss of coverage – either 23 million or 22 million depending on the version – is usually the first thing that’s cited in the litany of terrible consequences.

*Oh dear Lord. As I put the period on the above sentence I got word that the Senate has agreed to move forward voting on repeal and replace with literally no idea what they are voting on.*

I’m going to continue with this blog post now and assume that the basic tenets they’ve been promoting won’t change in the new mystery version.

One thing that hasn’t been talked about as much but that is also extremely troubling is the diminished quality of coverage that would be left under the various proposals for people insured through the Marketplace. Maybe it hasn’t been covered as much because it’s hard to get past the tens of millions who won’t have coverage at all, but I think it’s worth talking about. The bottom line is, for those lucky enough to retain coverage, it’s very likely that coverage will include fewer benefits and cost more. Why? Let’s look at quality of coverage through the dystopian lens of post-“Better Care” Reconciliation Act implementation.

Essential Health Benefits

When you are thinking about health insurance coverage, and whether or not it is “good” coverage, you likely think about the things a plan covers. For instance, prescription medication is pretty important in managing health. So is, say, emergency care, hospitalization or pregnancy care. A reasonable person would conclude that an insurance plan that doesn’t cover these essential health benefits isn’t a very good plan, right?

The policymakers that crafted the Affordable Care Act wanted to ensure that the insurance plans that would be sold through the insurance marketplace were actually good plans that included “essential health benefits” and so they were very deliberate in defining the benefits that all plans would have to include. This is the list of the ACA’s 10 essential health benefits.

1. Ambulatory patient services

2. Emergency services

3. Hospitalization

4. Maternity and newborn care

5. Mental health and substance abuse disorder services, including behavioral health treatment

6. Prescription drugs

7. Rehabilitative and habilitative services

8. Laboratory services

9. Preventive and wellness services and chronic disease management

10. Pediatric services, including oral and vision care

Changes to 1332 Waivers

According to the Brookings Institution, the BCRA puts these benefits and the quality of coverage we know today at risk through changes to its 1332 waiver rules. The ACA created the 1332 waiver as a way for states to request permission to waive provisions of the ACA through State Innovation Waivers so long as the pilot program did three things:

1. Covered the same number of people.

2. Provided coverage at least as affordable and comprehensive as that under the ACA.

3. Did not increase the federal deficit.


The BCRA changed the requirements around the 1332 waiver so that the only bar states needed to meet is the third one – that the pilot doesn’t increase the federal deficit.

But what does this mean on a practical level? Insurers, decrying the “collapsing health insurance marketplace” will appeal to states to seek waivers to allow them to limit coverage and control their costs. Once a state gets approval of such a waiver and sets new limits on essential health benefits, people who secure coverage through the individual market or the Obamacare exchanges could be in a situation with no good options. Here’s why:

1. A state redefines its “essential health benefits” and fewer services are required. Let’s say it’s prescription drugs.

2. All of the insurers that offer individual or marketplace plans realize they can charge much lower premiums since they don’t have to cover prescription drugs anymore.

3. Any insurer who considered maintaining prescription drugs as part of its coverage would have to charge higher premiums and would no longer look competitive. Most simply wouldn’t.

4. It would be very difficult for a consumer to find any plan that offered this benefit.

5. Quality of coverage on the individual market and the Exchange would decline.


In addition, while premiums might indeed be lower, out-of-pocket costs for consumers would likely be higher. Healthcare needs do not go away just because something isn’t covered. Patients, in this scenario, would still have to pay for their prescription drugs but would do so at full cost and out of pocket. For many, this would be much more expensive – and ultimately, prohibitive. 

You’re Safe with Group Coverage, Right?

If you’re thinking this doesn’t affect you because you have group coverage, think again. Even though essential benefits are not directly tied to group coverage, I promise, changes in the waiver program and essential benefits requirements puts the quality of your coverage at risk as well. It has to do with out-of-pocket maximums and lifetime limits and you are not going to like it one bit. Find out why in my next blog post.

Posted in Healthcare Reform

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