Senate bill guts pre-existing condition protections for small business plans and the self-employed.

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IN OTHER NEWS: Senate bill guts pre-existing condition protections for small business plans and the self-employed.

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Senate GOP health bill quietly brings back preexisting conditions
A loophole could allow insurance plans to once again discriminate against the sick.
Updated by Sarah Kliffsarah@vox.com Jul 11, 2017, 11:40am EDT

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Photo by Alex Wong/Getty Images

The Senate health care bill could once again allow insurance companies to offer some individuals plans that cover few benefits — and, in certain policies, exclude sick people entirely.

These changes result from a little-noticed provision that lets self-employed Americans opt out of the individual market and buy into the health plans that large employers provide, which have more lax regulatory standards.

Health policy experts at the Kaiser Family Foundation and Georgetown University have recently analyzed this provision, and concluded that these “small-business health plans” could siphon off healthy consumers.

These plans could, according to one analysis, “condition membership on the health status of small businesses” — including cases where the small business is a self-employed individual.

Sicker Americans would still be able to purchase coverage on the individual market, but those plans would be expected to get more expensive as healthier people flock to the cheaper options.
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“It’s a sleeper issue,” says Karen Pollitz, a senior fellow at the Kaiser Family Foundation who recently wrote a brief on the topic. “If you have people segmenting between a regulated market and a deregulated market, that could be pretty destabilizing.”

The individual market under the Affordable Care Act has long struggled to attract healthy consumers, who help lower premiums for enrollees with high medical bills. This provision of the Senate bill would likely exacerbate that problem by giving healthy people a way to leave the market and buy skimpier coverage through an association.

This could harm consumers in two ways. First, it could badly damage the individual market by leaving behind a sicker, more expensive population. Second, these association health plans may not cover expensive benefits like maternity care or mental health services, which could leave enrollees in a lurch should unexpected medical needs arise.

"You'd have a shifting of the healthiest part of the self-employed cohort, who would have the option to look at both markets and pick the one that worked better for them,” says Kevin Lucia, a health researcher at Georgetown University who has studied the issue. “This would leave behind the unhealthy people in the individual market, including the self-employed, and over time result in less plan choices and higher premiums for consumers.”



The Senate bill lets self-employed Americans buy into skimpier benefit plans