Critics argue such mandates inflate the cost of insurance by requiring consumers to purchase more insurance than they want: The classic example is an older male forced to purchase coverage that includes maternity care.
The problem is that if coverage of needs such as maternity care or mental health is not included in all policies, the only people likely to buy it a la carte are those who expect to use it. And that will rapidly raise the cost of such coverage—if insurers offer it at all.
“The losers would generally be people who want to buy a comprehensive insurance policy,” said Sabrina Corlette, a research professor at the Center on Health Insurance Reforms at Georgetown University. “Because once you give carriers flexibility to design the benefit package, they will do so to attract healthy people. No chump insurance company is going to be out there offering a comprehensive package, because then they'll be stuck with higher-risk enrollees.”
Drew Altman, president of the nonpartisan Kaiser Family Foundation, agrees. “The people who liked their pre-ACA plans were mostly healthy people who wanted cheap limited plans (and see no obligation for risk-sharing),” he wrote in an email. “Those folks will like this. Everyone else: no.”
Such a sweeping and likely disruptive restructuring of the individual insurance market may ultimately antagonize Republican moderates as much as the opportunity to uproot a core regulatory legacy of Obamacare attracts conservatives. On Thursday afternoon, Republican Senator Susan Collins of Maine, who had already expressed opposition to the House bill, raised more concerns about the latest proposals to eliminate the mandatory benefits. “The problem with that is while I would welcome some changes to improve the flexibility of plans that could be sold, we need to remember that the essential health benefits includes substance abuse and mental-health treatment, which are critical to retain for my state given the opioid crisis,” she told reporters. “Preventative care, vaccinations for children save money in addition to saving lives.”
As Collins’s comments show, it’s unclear whether eliminating the guaranteed benefits could attract enough votes in the Senate, even if the chamber’s parliamentarian allows the proposal to be included in a reconciliation bill that’s exempt from filibuster.
Uncertainty over whether the provision will ultimately be included in any final repeal legislation is making House moderates even more reluctant to vote for it—and heightening the two-front, left-right pattern of defection that forced the House GOP leadership Thursday to pull the bill, at least temporarily.
Eliminating the essential health benefits reinforces the core dynamic of the underlying House repeal-and-replace plan. In its analysis of the original bill, the Congressional Budget Office concluded it would lower premiums for younger and healthier consumers, but substantially raise them for people with greater health needs—particularly older, working-age adults. The CBO also predicted that the bill would increase out-of-pocket expenses for consumers in the individual market, because the insurance available would cover less of their total medical costs than it did under the ACA. Reaching a similar conclusion, Kaiser this week calculated that deductibles under the House Republican bill would increase by about 60 percent compared with under the ACA.