Health Bill May Shut Out One-Sixth of Sick: CBO

Rep. Tom MacArthur, R-N.J., proposed an amendment to win support for the bill from some House Republicans who are especially hostile toward the Affordable Care Act.

Part of the MacArthur amendment, which was added to the House health bill shortly before it passed, would give a state the option of asking for a partial waiver of the current rules that forbid health insurers from considering an applicant's health when deciding what to charge for coverage.

If a state received a MacArthur amendment waiver, the current ban on medical underwriting would still apply in that state for adults who could show they had always had health coverage in place.

In a waiver state, insurance regulators could let insurers charge people with health problems, such as obesity, cancer or hemophilia, higher rates than they charge healthy people. Those states would get subsidies they could use to set up special health insurance programs for people with health problems who could not show they had always had coverage in place.

"People who are less healthy … would ultimately be unable to purchase comprehensive nongroup health insurance at premiums comparable to those under current law, if they could purchase it at all, despite the additional funding," the analysts predict. "As a result, the nongroup markets in those states would become unstable for people with higher-than-average expected health care costs."

Some of those high-risk people who were shut out of the market would become uninsured, but others would get coverage from their own employer, or from a family member's employer, the analysts predict.

Partly because of those effects, individual health commercial enrollment would be about 1 million lower in 2020, when the new MacArthur waiver rules would take effect, and about 4 million lower in 2026, according to the analysis.

Health insurers today cover about 20 million people through individual health insurance policies.

The budget analysts also looked at the effects of the MacArthur amendment on what consumers would pay for coverage, after various subsidies, premiums and benefits design rule changes took effect.

Net individual coverage costs might be about 5% to 25% lower than under the original version of H.R. 1628 for many low-income individuals in states that took advantage of a MacArthur waiver to ease health plan benefits mandates and loosen the underwriting rules for people without proof of continuous coverage, according to the analysis.

The revised version would be much worse, however, for a single 64-year-old with annual income of about $26,500, or 175% of the federal poverty level.

That moderate-income 64-year-old would pay about $1,700 per year for coverage out of pocket under current rules.

The net cost would soar to $14,600 per year under the original version of H.R. 1628, and another 10%, to $16,100 per year, under the current version of the bill, according to the budget analysts.

— Read  4 ACA Change Paths That Just Got More Popular on ThinkAdvisor.