The revised Better Care Reconciliation Act was released today, and here's the bottom line: It returns individual insurance markets to the bad old days when insurers competed on insuring the healthy and finding ways to avoid covering the sick.
There are a host of changes in the new BCRA, most of which leave the fundamental thrust of the legislation intact. But there's one addition that genuinely changes everything.
Included in the new bill is a version of Ted Cruz's amendment allowing insurers to offer plans that don't comply with Obamacare's insurance regulations so long as they also offer plans that do comply with Obamacare's insurance regulations.
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So imagine you're an insurer. As long as you offer some Obamacare compliant plans, you can also offer plans that deny people coverage for preexisting conditions, that don't cover mental health benefits or pregnancy.
What will happen here is clear: The plans that have to offer decent coverage to anyone who wants it, no matter their health care history, will become a magnet for the old and the sick or the soon-to-be-sick, as they can't afford, or perhaps can't even buy, the other plans. That will drive premiums in those plans up, pulling younger, healthier people into the non-compliant plans.
The Senate bill thinks it has a fix: a roughly $200 billion fund to offset the costs of sick enrollees. So, in short, what the GOP bill attempts to do is to rebrand high-risk pools as Obamacare plans and make them subsidized dumping grounds for the sick and the old, while everyone else buys insurance in a basically unregulated market.
This is a very bad idea for anyone who is sick, has been sick, or is likely to get sick. It attacks the core changes Obamacare made to build insurance markets that serve the sick, the well, and, crucially, everyone in between.
Prior to the Affordable Care Act, insurers in the individual market worked to sign up healthier people and avoid sicker people. They did this in ways that were crude, like simply refusing to insure people with preexisting conditions, and ways that were subtler, like designing plans that made sense for the healthy but didn't cover key services needed by the sick.