One day after President Barack Obama announced that all Americans would be allowed to keep their canceled health care policies for an additional year, the House of Representatives passed a bill that goes even further to guarantee access to plans that do not meet the Affordable Care Act’s stricter policy standards.
The “Keep Your Health Plan Act of 2013,” sponsored by Representative Fred Upton (R-MI), passed in a 261 to 157 vote on Friday afternoon — 39 Democrats joined the majority of the Republican caucus, while four Republicans voted against the measure.
Upton’s bill would allow insurers to keep selling their existing plans, whether or not they comply with the Affordable Care Act’s stricter quality standards. It would also allow insurers to sell those plans to new consumers. In other words, insurance companies would no longer be prevented from refusing coverage to those with pre-existing conditions, or charging higher prices to the sick or elderly, among the many other patient protections offered by the health care reform law.
As New Republic’s Jonathan Cohn writes, “A vote for the Upton bill, in short, is a vote for everything Americans hate about health care.”
In addition to undermining the law’s consumer protections, the bill could significantly raise premiums in the Affordable Care Act’s exchanges. As Sarah Lueck of the Center for Budget and Policy Priorities explains:
[U]nder the Upton bill, insurers offering existing individual-market plans outside of the insurance marketplaces in 2014 could continue to reject people with health problems and charge sicker and older people far higher premiums than younger and healthier people must pay. This would deter sick people from enrolling in plans outside of the marketplaces while enticing younger, healthier people to choose them instead of marketplace plans. In contrast, plans offered through the marketplaces would have to comply fully with ACA requirements — for example, they must take all applicants regardless of pre-existing medical conditions and cannot charge higher premiums based on people’s health status.
The Upton bill would create such a disparity in market rules between grandfathered plans and marketplace plans that the people most interested in remaining in the former would heavily be a younger and healthier group — and hence less costly to cover — than the people who would enroll in the latter. This would cause the pool of people buying coverage in the marketplaces to be less healthy, which in turn would drive up premiums substantially for marketplace coverage. This dynamic, known as adverse selection, occurs when healthier and less-healthy people separate into separate pools.
Due to these defects, the White House has announced that President Obama will veto the bill if it reaches his desk.
“The administration supports policies that allow people to keep the health plans that they have. But, policies that reverse the progress made to extend quality, affordable coverage to millions of uninsured, hard-working, middle-class families are not the solution,” it said in a statement. “If the president were presented with [the bill], he would veto it.”
The odds of the bill reaching the president’s desk are exceedingly slim; there is almost no chance that the Democratic-controlled Senate would pass a bill that so significantly undermines the Affordable Care Act.
Before Upton’s bill passed, the Republicans prevented a vote on a Democratic alternative — introduced as a “motion to recommit” by Rep. Rob Andrews (D-NJ) — citing the plan’s additional consumer protections as beyond the scope of his bill, and therefore “non-germane.” The Democratic bill would have extended canceled policies through 2014, prevented insurers from selling the policies to new customers, and allowed the Department of Health and Human Services to contest discriminatory policies.
The procedural move was likely intended to deny Democrats political cover while voting against Upton’s plan.
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Copyright 2013 The National Memo