Republicans have been touting the MacArthur amendment to Trumpcare, the one that allows states to opt out of pre-existing conditions protections and essential health benefit requirements, as a great thing that lets states determine what works best for their own residents. Except it doesn't. The ripple effect of one state making the decision to give up these protections could be national, argues Brookings fellow Matthew Fielder. Not just for Obamacare customers, but for people with employer coverage, too.
In particular, a single state’s decision to weaken or eliminate its essential health benefit standards could weaken or effectively eliminate the ACA’s guarantee of protection against catastrophic costs for people with coverage through large employer plans in every state. The two affected protections are the ACA’s ban on annual and lifetime limits, as well as the ACA’s requirement that insurance plans cap enrollees’ annual out-of-pocket spending. [...]
Understanding why a single state’s waiver could undermine the ACA’s protections against catastrophic costs nationwide requires delving into the details of how these ACA provisions work. In brief, the ACA generally banned private insurance plans from imposing annual or lifetime limits on the dollar amount of care they would cover and required plans to cap enrollees’ annual out-of-pocket spending. [...] However, the ACA’s ban on annual and lifetime limits only applies with respect to care that is considered essential health benefits. Similarly, the ACA only requires that plans cap enrollees’ annual out-of-pocket spending on care that is considered essential health benefits. Thus, as the definition of essential health benefits narrows, the scope of these requirements narrows as well. [...]
The breadth of these requirements therefore depends crucially on which definition of essential health benefits applies to any particular plan. For individual and small group market plans, the applicable definition is simply the definition that applies in the state of issuance. But the situation is more complicated for large employer plans, which accounted for around 86 percent of total enrollment in private employer plans in 2015, corresponding to around 110 million enrollees nationwide. These plans are not subject to essential health benefit requirements when determining what types of health care they must cover; the definition of essential health benefits matters only for determining the scope of the required protections against catastrophic costs. These plans are also particularly likely to cover individuals working in multiple states. In light of these complexities, current regulations and guidance permit large employer plans to apply any state’s definition of essential health benefits for the purposes of determining the scope of the ban on annual and lifetime limits and the requirement to cap out-of-pocket spending.
House Republicans are hell-bent on ripping away our health insurance. Call your member of Congress at 202-224-3121, and demand they vote NO on a renewed Trumpcare that is worse than the one before. Remind them they work for you.
So if a state gets to define essential health benefits itself, any large employer anywhere could adopt that state's definition and decide to cover, say, maternity care or prescriptions or mental health and substance abuse care. And this: "a large employer plan that wanted to impose an annual or lifetime limit on these services could simply adopt that state’s definition of essential health benefits." Meaning that one serious illness or accident, or as analyst Topher Spiro points out a premature infant in the NICU, could once again bankrupt you even if you have insurance because those limits on how much insurance pays out would be back. Even if you get your insurance from your employer.
But more: "In a more extreme, but still plausible, scenario in which even one state elected to completely eliminate its essential health benefit standards, the requirement to provide these protections would effectively disappear entirely for large employer plans nationwide." If a state wanted to try to protect its residents and keep those requirements for large employer plans, they couldn't. Under existing law—the Employe Retirement Income Security Act—states can't regulate self-insured plans.
Zombie Trumpcare breaks just about everything. Which Republicans would understand if they actually cared about anything but the politics here, if they had taken any time over the past seven years in which they've been screaming "REPEAL" to actually understand how all this works. But they haven't, they don't care about health policy, they want their repeal and their big tax cuts for the rich.
When they're constituents start seeing how much this is costing them, though, maybe then they'll care.
