It’s way down there, at the bottom of the new bill, in brackets. The largest addition to the new draft of the Republican Better Care Reconciliation Act, released by Senate Majority Leader Mitch McConnell Thursday, is stashed away at the end of a 172-page series of amendments, Social Security Act references, and bits of tax code. The brackets around it indicate it’s not even fully part of the draft. But that new piece of language, based on language from Senator Ted Cruz, is a much more radical policy change than any of the other changes to private insurance in the bill.
The proposed amendment would create a two-tiered system in the exchanges, and would likely leave sicker people paying higher premiums. It would do that with a provision that would allow insurers to provide alternative plans off the exchanges that don’t abide by rules regulating their value and benefits, so long as they offer regulated plans on the exchanges. The new tier of barebones plans would also be eligible to receive premium tax credits. The amendment would allocate an additional $70 billion from the Stability Fund from 2020 to 2026 to help pay for the rising costs in the old tier and stabilize them.
Stabilizing the insurance markets is key, because even without the Cruz amendment, the BCRA contains plenty potential disruptions to exchange markets. The first draft of the BCRA eliminated the individual mandate, increased the amount that older people could be charged for insurance, and allowed limited waivers for states to further relax rules on insurers, all of which would tend towards healthy people leaving exchanges and premiums likely rising steeply for sick people, people with pre-existing conditions, and older people.