The rush to gather support for legislation can leave the truth behind. Speaker Paul Ryan claims that the MacArthur amendment to the American Health Care Act (AHCA) protects people with pre-existing conditions while lowering premiums. Let us look at each of Speaker Ryan’s “verified” claims one-by-one and explore why each claim is full of misdirection and misinformation.
Claim #1: The MacArthur amendment protects people with pre-existing conditions.
False. At first glance, the MacArthur amendment seems to retain the core provisions of the Affordable Care Act (ACA) that protect Americans with pre-existing conditions. It seems to prohibit insurance companies from charging higher premiums to individuals with pre-existing conditions, also known as community rating, and it seems to prohibit insurance companies from denying coverage to individuals with pre-existing conditions. Upon closer inspection, the MacArthur amendment simply punts the decision to cover pre-existing conditions to states, giving federal legislators political coverage, letting them wash their hands of any responsibility and insulating themselves from blame by allowing themselves an escape to say, “Your state chose to gut protections for pre-existing conditions. Don’t blame us.” However, it is fairly telling when Rep. Billy Long of Missouri and Rep. Fred Upton of Michigan, prominent Republicans who have previously led ACA repeal efforts, come out and say they cannot consciously support the AHCA because of how the MacArthur amendment undermines protections for those with pre-existing conditions.
Claim #2: It provides a strict process to receive a waiver from federal mandates.
False. According to the legislative text of the MacArthur amendment, states may simply “attest” that their waiver will reduce premiums, increase coverage and plan choice, or stabilize the marketplace. This will not be hard for states to claim since any reductions in benefits will result in lower premiums. The claim that this is a strict process is also confusing because the legislative text states that waivers would be automatically approved by Health and Human Services (unless they were disapproved for noncompliance within 60 days). Unlike the requirements for 1332 waiver applications, there is uncertainty as to whether states will even be required to provide evidence of what their waiver purportedly achieves.
Claim #3: It gives states flexibility in addressing health care premiums.
Not really. If flexibility equates to allowing states to strip away the Essential Health Benefits (EHBs) and community rating (as mentioned above) in order to decrease premiums, then yes, this amendment does exactly that. Allowing states to define their own version of EHBs undermines lifetime and annual limits and caps on out-of-pocket expenditures because these provisions only apply to EHBs. The changes to these provisions could potentially impact large group and self-insured employer plans as well. In addition, the MacArthur amendment also allows states to eliminate benefits that were often omitted prior the ACA, such as maternity coverage and mental health parity. Premiums may decrease because nothing is actually covered; but then why pay for non-insurance?
Claim #4: The MacArthur amendment will help lower premiums for Americans.
Half-true. The MacArthur amendment potentially drives down premiums because the health plans are less generous (meaning fewer covered services and benefits) and those who are sicker pay significantly more and placed into a high-risk pool. High-risk pools segregates high-cost individuals and historically charges premiums that are twice the amount a health person would pay and imposes waiting periods and annual limits. Even Wisconsin’s high-risk pool (the example that Speaker Ryan often uses) did not cover pre-existing conditions for the first six months! It would be more accurate for Speaker Ryan to say that under the MacArthur amendment, premiums will decrease for those who healthy and significantly increase costs for those who are sick.
Does it add up?
No. Just because Speaker Ryan places the word “verified” in front of his statement, does not mean that makes those statements truthful. Removing or weakening the EHBs means that certain conditions or services may not be covered, allowing insurance companies to essentially select which individuals they want to cover (hint: they don’t want the sick). Allowing insurance companies to remove community rating means that insurance companies can simply price you out of their coverage if you have a pre-existing condition since they cannot technically refuse you coverage. While not directly stating that protections for pre-existing conditions will be gutted, the MacArthur amendment effectively compromises these protections and puts affordable health care out of reach for millions of Americans with medical conditions that are of no fault of their own (despite what Rep. Mo Brooks of Alabama believes).