As the Trump administration continued to woo state governors over healthcare reform, two of the US insurance industry’s most powerful organizations said a crucial provision in the Senate Republican healthcare bill, crafted by Ted Cruz and allowing the sale of bare-bones policies, was “unworkable in any form”.

The judgment dealt a considerable blow to party leaders’ efforts to win support for their legislation.



Leaders included the Cruz provision in their second healthcare bill in hopes of winning votes from other hardline conservatives. But moderates have worried the bill will cause people with serious illnesses to lose coverage, while some conservatives say it does not go far enough.

Two of the 52 Republican senators have already said they will oppose the legislation. Majority leader Mitch McConnell cannot lose any others for the legislation to survive a showdown vote expected next week. A 50-50 tied vote, with all Democrats opposing the measure, would be enough for the bill to pass with a vote from Vice-President Mike Pence.

On Air Force One on Thursday, Donald Trump told reporters healthcare reform was the “only thing more difficult than peace between Israel and the Palestinians”.

The bill currently in play in the Senate is a second attempt to deliver on the party’s promise to repeal Barack Obama’s healthcare law, which they have been pledging to do since its 2010 enactment. A bill that passed the House in May is viewed by Senate Republicans as unworkable.

The criticism of Cruz’s provision was lodged in a rare joint statement by America’s Health Care Plans and the BlueCross BlueShield Association. The two groups released it late on Friday in the form of a letter to McConnell.

“It is simply unworkable in any form,” the letter said, adding that the provision would “undermine protections for those with pre-existing medical conditions”, increase premiums and lead to “widespread terminations of coverage”.

The provision would let insurers sell low-cost policies with skimpy coverage, as long as they also sold policies that met a stringent list of services required under the ACA, like mental health counseling and prescription drugs.

Cruz says his proposal would drive down premiums and give people the option of buying the coverage they feel they need. Critics say it would encourage healthy people to buy the skimpy, low-cost plans, leaving sicker consumers who need more comprehensive coverage confronting unaffordable costs.

The insurers’ statement backs up that assertion, lending credence to wary senators’ worries and complicating McConnell’s task of winning them over.

The two insurance groups said premiums would “skyrocket” for people with preexisting conditions, especially for middle-income families who did not qualify for the bill’s tax credit. They also said the plan would leave consumers with fewer insurance options, so “millions of more individuals will become uninsured”.

According to an analysis by the BlueCross BlueShield Association, major federal consumer protections would not be required for new plans permitted by the Cruz amendment. Among them are guaranteed coverage at standard rates for people with pre-existing conditions, comprehensive benefits, coverage of preventive care – including birth control for women – at no added cost to the consumer, and limits on out-of-pocket spending for deductibles and copayments.

The bill provides $70bn for states to use to help contain rising costs for people with serious conditions. But the insurance groups’ statement says that amount “is insufficient and additional funding will not make the provision workable for consumers or taxpayers”.

The Cruz provision language in the bill is not final. McConnell, who postponed the Senate’s August recess by three weeks, and other Republicans are considering ways to revise it in hopes of winning broader support. McConnell and top Trump administration officials planned to spend the next few days cajoling senators and governors in an effort to nail down support for the bill.

On Saturday, health and human services Secretary Tom Price and Centers for Medicare and Medicaid Services Administrator Seema Verma made their pitch in a closed-door meeting of the bipartisan National Governors Association.

Connecticut governor Dannel Malloy, chairman of the Democratic Governors Association, said the mood was “tense” and “there are a lot of Republican governors who apparently have a neck problem, because they were all looking down”.

Pence also addressed the governors at the Rhode Island conference on Friday and met several of them privately. Wisconsin’s Republican governor Scott Walker said he talked with Pence but declined to say if he supports the bill.

The nonpartisan Congressional Budget Office is expected to release its analysis of McConnell’s revised bill early next week, including an assessment of Cruz’s plan.

The office estimated that McConnell’s initial bill would have caused 22m additional people to be uninsured.