Even Insurance Companies Say Cruz Amendment is Disastrous

I wrote last week about the amendment that Ted Cruz added to the 2nd version of the Senate Obamacare repeal bill, which would allow insurance companies to market policies not compliant with the ACA and herd everyone else into high-risk pools. Even the insurance companies are saying this is a terrible idea that will lead to higher premiums.


Big players in the insurance industry, which has mostly held back public criticism of the GOP’s Obamacare repeal push, eviscerated a Sen. Ted Cruz (R-TX)-sponsored provision that was included in the latest version of the Senate legislation.

“It is simply unworkable in any form and would undermine protections for those with pre-existing medical conditions, increase premiums and lead to widespread terminations of coverage for people currently enrolled in the individual market,” Blue Cross Blue Shield and America’s Health Insurance Plans said Friday in a rare joint letter to Senate leaders.

The Cruz proposal, known as the “Consumer Freedom Option,” would allow insurers to sell plans that would be free of many Affordable Care Act mandates if they were also selling Obamacare-compliant plans.

Insurers and outside health experts had already been raising their concerns with the idea when it was being discussed in the abstract, warning the it segment the market between healthy people choosing the non-compliant plans and sick people the comprehensive ACA ones. The insurers upped their complaints in the letter Friday.

“This would allow the new plans to ‘cherry pick’ only healthy people from the existing market making coverage unaffordable for the millions of people who need or want comprehensive coverage, including, for example, coverage for prescription drugs and mental health services,” the insurers said.

The herding of all but the healthy into high-risk pools, combined with the repeal of the mandate, guarantees higher premiums, greater uncompensated care and thus higher cost of medical care for everyone.

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