As the Senate considers a replacement for the Affordable Care Act, Sen. Ted Cruz (R-Texas) has proposed an amendment saying “if an insurance company sells in a given state a plan that is consistent with the [ACA’s insurance regulations], that company can also sell any other insurance plan consumers desire.”
That proposal would maintain the coverage guarantees established by the ACA for individuals with pre-existing conditions on the exchange, while allowing individuals without pre-existing conditions to regain the affordable plans they enjoyed prior to the ACA – potentially at about a third of the cost of those currently available on the exchanges.
The exchange would be turned into a safety net, with subsidies focused on those who truly need them to afford coverage. The cost of subsidizing those with pre-existing conditions would be borne by taxpayers in general, rather than focused narrowly in the premiums of those purchasing plans on the individual market – allowing that insurance market to be restored to health.
It is therefore worthwhile to identify particular criticisms of Cruz’s proposal, and to assess their specific merits.
Concern: It would undermine consumer protections and quality coverage of those with pre-existing conditions
“It would create big disincentives for insurance companies to attract customers into their compliant plans, since no company would want to take on the risks of covering so many very sick patients," said Sabrina Corlette of Georgetown University.
Individuals with or without pre-existing conditions would....
Chris Pope is a senior fellow at the Manhattan Institute.