The Upton amendment follows from the earlier MacArthur amendment, which wooed conservatives but spooked moderates. That earlier amendment allows states to opt out of the Obamacare rule that prohibited health plans from charging people more for their insurance because of their existing health conditions.
To let insurers opt out of those rules, states must meet certain conditions, such as setting up a "high-risk pool" for people with high medical costs. And people could not be charged more as long as they maintained coverage.
But many experts believed that the funding available under AHCA would not be sufficient to pay for those high-risk pools and prevent major price hikes for the patients with preexisting conditions.
So the Upton amendment pushes even more funding — $8 billion over five years — toward those costs. It is an addition to the $100 billion-plus fund originally included in the bill for states to create programs that reduce insurance costs.
The new money is designated specifically for states that seek a waiver under AHCA and for people in those states who would see higher insurance premiums or out-of-pocket costs because of that waiver.
States could use the money to pay insurers directly to keep costs down, to help people buy insurance in the high-risk pool, or to provide direct subsidies for people to buy their own insurance, Larry Levitt at the Kaiser Family Foundation told me.
But, Levitt said, "There is still nothing in the bill that guarantees people with preexisting conditions will have access to affordable coverage if states waive community rating."
The problem is that the bill neither specifies how the money should be spent nor provides enough of that money, Levitt said. People in states with the AHCA waivers could see "massive premium increases," he told me: "There's no way a reinsurance program or direct subsidies could ever fully offset that for everyone, and states aren't required to do so."
As for high-risk pools, which Vox's Sarah Kliff explained here, Levitt said the funding is "inadequate" and "there are no requirements for what the eligibility, premiums, or benefits in high-risk pools would have to be."