The proposal backed by House conservatives would give states sweeping power to opt out of core Obamacare provisions. | Getty GOP repeal bill would unravel protection for sick Americans

Republicans’ latest bid to dismantle Obamacare threatens to turn back the clock on protections for the sickest Americans — and stealthily undermine one of President Donald Trump’s biggest health care promises.

The proposal backed by House conservatives — and negotiated with moderate Rep. Tom MacArthur (R-N.J.) — would give states sweeping power to opt out of core Obamacare provisions. Those states would instead set up “high-risk pools,” tried by about three dozen states, red and blue, in the years before the Affordable Care Act to cover people with expensive medical conditions. Most of the pools didn’t work, leaving countless people with cancer, diabetes and other expensive diseases with inadequate coverage — if they had anything at all.


The latest legislation satisfies demands from the party’s rightmost flank, which had wanted a sharper break with Obamacare. Yet it’s not clear that it can pass the House, particularly after moderates repeatedly pledged to protect the millions of Americans with pre-existing conditions who are likely to lose their current coverage and end up in these high-risk pools.

The compromise legislation would allow insurers in those states to charge sicker people higher premiums if they haven’t been consistently covered. That marks the revival of a system that could stick the nation’s most vulnerable with skyrocketing insurance costs and far skimpier benefits — and renege on Trump’s promise not to cut Americans’ health coverage.

“Except pre-existing conditions, I would absolutely get rid of Obamacare,” Trump said a year ago during a CNN-Telemundo campaign debate. “I want to keep pre-existing conditions. I think we need it, I think it’s a modern age, and I think we have to have it.” The House GOP has also committed to protecting people who need expensive treatments, vowing on its website not to let insurers charge anyone more for having a pre-existing condition.

This bill doesn’t meet those standards. The Congressional Budget Office estimated than an earlier version of the legislation would mean 24 million fewer people would have coverage in 10 years — and that figure is likely higher with this approach.

“The bottom line is that many people will not be able to afford insurance,” Rep. Elijah Cummings (D-Md.) said. Trump repeatedly promised to come up with a better plan, but this, Cummings said, would leave people with “no plan.”

The MacArthur amendment would clear the way for states to eliminate the health law’s “community rating” requirement, which prevents insurers from charging different prices based on whether someone is sick or healthy. But the state would then have to have a fallback such as a high-risk pool for those priced out of the market.

States often turned to high-risk pools in the pre-Obamacare era, in an attempt to modestly expand coverage to people with pre-existing conditions. But enrollees often paid twice as much as healthy people and received both skimpier benefits and caps on coverage. Their policies often excluded treatments for the very condition that had brought them to the high-risk pool in the first place — for instance, a cancer patient who couldn’t get cancer treatment.

Despite those hefty premiums, high-risk pools were often drastically underfunded, forcing states to restrict enrollment, create waiting lists and limit subsidies to low-income people. By 2011, the state high-risk pools had enrolled just 2 percent of the eligible population on average, and lost a collective $1.2 billion.

“High-risk pools have a long track record, and it’s not particularly pretty,” said Jonathan Oberlander, a health policy professor at the University of North Carolina. “You have to be willing to fund them at enormous levels.”

House Speaker Paul Ryan defended high-risk pools on Thursday morning, saying the one in his home state of Wisconsin “was pretty actually darned good,” and federal funding would make them work even better.

But only 21,000 people — or about 7 percent of the eligible population — were enrolled in Wisconsin’s high-risk pool before it was shut down when Obamacare took effect. Premiums could run twice the private-market rate, with only the poorest enrollees qualifying for limited subsidies. Health plans carried $2 million lifetime caps and, in an effort to keep costs low, they didn’t actually cover an individual’s pre-existing condition for the first six months of enrollment.

The Obamacare repeal bill would set aside $15 billion in federal funding to help them, said Rep. Mark Meadows (R-N.C.), who helped negotiate the latest proposal. States could also dip into the $100 billion pool designed for market stabilization initiatives.

MacArthur, who calls Obamacare’s pre-existing conditions protection “sacrosanct,” disagrees with the critics. He maintains that the changes wouldn’t lock the sickest people out of the market. His amendment preserves the Obamacare provision banning discrimination based on pre-existing conditions — except it’s toothless if insurers can charge sicker people a lot more for their coverage.

Health policy experts warn that it’s not enough to adequately care for the nation’s sickest Americans.

"By simply being able to price the policy out of reach for the average mortal, it seems to be to be kind of illusory,” said Sabrina Corlette, a professor at Georgetown’s Center on Health Insurance Reforms and a former Democratic congressional aide. States that opt out would likely see a surge of people thrown back into the equivalent of a pre-Obamacare health system.

One alternative to the traditional high risk pools backed by some Republican lawmakers is an “invisible risk-sharing program,” a federal backstop for health plans that shoulders some of the costs for the most expensive enrollees. That concept has a chance at faring better: The money would be used to reimburse insurers and help them to keep premiums low, rather than forcing sick people out of the market.

But the idea is largely untested. Maine operated a risk-sharing program for just 18 months before Obamacare made it obsolete. There’s still debate over how significantly it contributed to falling premiums in the state’s individual market, as well as what it would cost to expand a program from covering a few thousand residents to potentially hundreds of thousands nationwide.

Morning eHealth A daily report on the intersection of health care and technology — in your inbox. Email Sign Up By signing up you agree to receive email newsletters or alerts from POLITICO. You can unsubscribe at any time. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

“We can’t really draw conclusions about how adequately it was funded,” said Trish Riley, executive director for the National Academy for State Health Policy, who was a state health official in Maine for many years. “Doing reinsurance is an expensive undertaking.”

All that has left even GOP lawmakers questioning whether the MacArthur amendment can become more than an expensive path toward breaking the party’s pledge to the nation’s sickest.

“People like me don’t want to go back to pre-ACA,” Rep. Larry Bucshon (R-Ind.) said. “I’m still in the process of sorting out where we are, and how much money does that take.”