TrumpCare could gut employer health plans as well

A new analysis from the Brookings Institution explains that TrumpCare, which is on the verge of passing in the US House, won’t just decimate health coverage for people with pre-existing conditions and raise prices 66% on people age 50-64, but the legislation will also likely gut employer-based health insurance that most Americans rely on.

In a nutshell, TrumpCare would eventually permit employers to reinstate annual and lifetime limits (meaning, your plan would only cover $x of health care per year, and after you spend $Y over your lifetimes, your lose your insurance entirely).

And just as bad, TrumpCare permits employers to no longer honor the out-of-pocket max provisions of your health insurance plan. (For example, if your plan has a $6,000 annual out-of-pocket max, that means that once you spend $6,000 on health care in-network during a single year, your plan covers 100% of the rest of your in-network health costs for that year.)

President Obama signs the Affordable Care Act, via Wikimedia Commons

Under TrumpCare, all of those will likely be gone. Why? It’s a bit complicated, but basically, TrumpCare, in addition to gutting pre-existing conditions protections and drastically raising prices on older Americans, also permits state to opt out of the “essential health benefits” provisions of the Affordable Care Act. Those provisions require every insurance policy to cover 10 basic things, such as maternity care, prescription drugs, and emergency services.

If states do opt out of those ten essential benefits, it could affect people with employer-based insurance because those annual and lifetime limits, and the out-of-pocket max, are only for essential benefits. Meaning, insurance companies can’t put any annual or lifetime max on essential benefits, but they can do it for other benefits. And insurance companies must cap your annual out-of-pocket costs for essential benefits, but they can keep charging you forever for benefits they consider non-essential.

What does this mean in practice? It means that if a state opts out of maternity care being an essential benefit, and you have a difficult pregnancy and birth that costs a lot of money, your insurance company may not cover it because the bill got too high for that one year, and/or your annual $6,000 out-of-pocket max doesn’t apply to maternity costs because they’re no longer “essential.”

And what’s worse, only one state needs to opt out of the essential benefits for major companies to drop these protections for their employees nationwide. Brookings has more:

Suppose that even one state secured a waiver that allowed it to drop maternity services, mental health services, or prescription drugs from the definition of essential health benefits—a plausible scenario since these services were commonly not covered in individual market plans prior to the ACA and since waivers would be easy to obtain.

In this case, a large employer plan that wanted to impose an annual or lifetime on limit on these services could simply adopt that state’s definition of essential health benefits. Likewise, a large employer plan that did not want to limit enrollees’ out-of-pocket spending with respect to these services could also take this approach.

In a more extreme, but still plausible, scenario in which even one state elected to completely eliminate its essential health benefit standards, the requirement to provide these protections would effectively disappear entirely for large employer plans nationwide.

This is what TrumpCare does. This is what Republicans in the US House are on the verge of passing.

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  • Randy Riddle

    My theory is that members of Congress will tout this as a “tweak” to the law, still blaming Obama for the whole thing (still calling the bad law “Obamacare”) and saying they couldn’t really do anything to it because of those pesky Democrats. And Cheeto will tweet that Andrew Jackson was really pissed about Obamacare.

  • Mike_in_the_Tundra

    We must be certain that everyone knows this at election time.

  • Badgerite
  • Badgerite

    And once again the House of Lords has exempted itself from the legislation they are proposing to make law. Their health insurance will still be required to provide all of the “essential benefits” as defined by Obamacare and all the restrictions on lifetime caps on benefits, denying insurance based on a pre-existing condition, etc. So they actually do like the law. It’s just that they like it for themselves but not for the American people and certainly not for the people who voted for them. The Trump Monster exemplifies the modern day GOP perfectly. The House of Lords.

  • Bill_Perdue

    In the same way that Obamacare gutted union healthcare and Medicare.

    “Obamacare: The reality hits home – 27 October 2016 – On Monday, the US Department of Health and Human Services announced that premiums for health insurance plans sold under the Affordable Care Act (ACA) will increase on average by 25 percent in 2017, raising health care costs of millions of working people by thousands of dollars.

    Coming on top of extremely high deductibles and co-pays and severe restrictions on doctors and hospitals available to most of those insured under the ACA, better known as “Obamacare,” the steep premium increases testify to the fact that the Obama administration’s “signature” legislation is a reactionary fraud, aimed at increasing corporate profits by gutting the health benefits won by workers over the course of decades of struggle.

    The entire health care overhaul is a scheme devised in collaboration with the insurance conglomerates to dismantle the system of employer-paid health coverage that emerged in the United States out of the mass struggles of the 1930s and 1940s, which established the industrial unions and extracted health insurance as a concession from the corporations. The lack of a government run program of universal health care in the United States was the result of the political subordination of the labor movement to the corporate-controlled Democratic Party by the anti-socialist trade union bureaucracy.”

    WASHINGTON — In his new budget, President Obama proposed on Monday to squeeze $399 billion over the next 10 years out of Medicare, Medicaid and other programs run by the Department of Health and Human Services.

    Under the proposals, many Medicare beneficiaries would have to pay more for their care and coverage. The president would, for example, introduce a co-payment for new Medicare beneficiaries who receive home health care services, and he would collect $4 billion over 10 years by imposing a surcharge on premiums for new beneficiaries who buy generous private insurance to supplement Medicare.

    In addition, Mr. Obama’s budget would reduce scheduled Medicare payments to teaching hospitals, hundreds of small rural hospitals, nursing homes and health maintenance organizations that care for older Americans and people with disabilities.

  • Jimmy

    And lets be honest here. Any company, no matter how liberal they might be, will take advantage of any loophole that will let them increase profits.

  • brel1

    I like to think this is going to make Democrats very popular by 2018, but it seems like such a long ways off. Can the news get any grimmer? Yeah, I know it can and it will.

  • Flori-DUH

    Who said anything about retaining any right to discharge your financial responsibilities to doctors and hospitals through bankruptcy? /s/

  • goulo

    And when Trump & Republican faithful lose their insurance or go bankrupt from medical costs… they will believe that it’s somehow all the fault of those evil Democrats.

  • Niblet58

    And it will dramatically increase medical bankruptcies as well.

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