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Saturday, July 15, 2017

The Cruz Amendment

With the GOP healthcare bill in the Senate coming to the fore, it's worth taking a look at the so-called Cruz amendment.  This would allow insurance companies to sell policies that do not meet all the minimum requirements set by the government so long as they also sell policies that do meet those requirements.  This needs a bit of background explanation.

1.  Obamacare included a long list of provisions that had to be included in all policies sold to individuals.  Things like pediatric dental services, maternity coverage, no lifetime maximum payouts and the like fall in this category.  As a result, people who would never need these services had to buy insurance that covered them.  A 60 year old widow with no children had to get coverage for her childrens' teeth (even though she has no children) and for possible maternity costs (even though she is past child bearing years.)

2.  The Senate GOP bill removes some of the many required provisions and lets states decide on certain other ones.  Nevertheless, the bulk of the requirements still must be met.

3.  The Cruz amendment would allow insurers not to meet all the required provisions so long as they sold policies that met all of them.  States, of course, would still set minimums for insurance within their borders.  Thus, if New York did not want policies sold which had a lifetime maximum under the policy, it could require that.  Pennsylvania could disagree and allow such policies within that state, although it could set levels for which those maximums would be allowed.  For example, the state could require that all policies have at least a $250,000 annual maximum. 

It's worth remembering that this sort of maximum payout was extremely common for many years prior to Obamacare especially in policies aimed at those unlikely to need more.  For example, colleges often sold health insurance for students with annual maximum coverage.  In my state prior to Obamacare, the University of Connecticut health policies cost students under $150 per month with a $250,000 annual maximum payout.  These are affordable policies for young people who often opt not to buy the more expensive policies that meet all the requirements. 

Other requirements are also unnecessary for many.  Should gay couples pay for maternity care or should they be allowed to opt out?

Many people argue that letting insurers sell policies that don't meet all the requirements will raise costs for everyone else.  Shouldn't those who might need to coverage be the ones to pay for it, however?  Why should people without children pay for dental coverage for kids?  Why should older families pay for maternity?  By letting people pick and choose the coverages they want, the costs for many will go down.

This was the way it worked prior to Obamacare.  I know that my employer paid extra each year to buy policies that had no annual maximum.  No one ever benefitted from that decision, but it was a choice made by the company, not the government.  So long as it is possible for anyone to buy a policy which includes all of the various requirements, no one else is being frozen out of coverage.  Those policies will cost more, but they will provide more. 

All in all, this seems like a reasonable course of action to me.

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