Study: Cruz amendment would increase premiums by 39 percent for ObamaCare compliant plans

Study: Cruz amendment would increase premiums by 39 percent for ObamaCare compliant plans
© Keren Carrion

An amendment to the GOP's health bill could lead to higher premiums for sick people and lower premiums for healthy people, a new analysis released Tuesday shows. 

Sen. Ted CruzRafael (Ted) Edward CruzSenate Dems hold floor talk-a-thon against latest ObamaCare repeal bill Overnight Finance: CBO to release limited analysis of ObamaCare repeal bill | DOJ investigates Equifax stock sales | House weighs tougher rules for banks dealing with North Korea GOP state lawmakers meet to plan possible constitutional convention MORE's (R-Texas) "Consumer Freedom Amendment" would allow insurers to sell plans that don't comply with ObamaCare regulations, as long as they also sell plans that do meet those requirements. 

High-risk, sicker individuals would likely buy the plans that comply with ObamaCare regulations while younger, healthier people would likely choose to purchase plans that don't, according to a study by Avalere Health, a healthcare consulting firm.

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Premiums for these ObamaCare compliant plans could be 39 percent higher compared to current law by 2022 while premiums for noncompliant plans could drop by 77 percent.

Avalere also concluded that the amendment could lead to 4.1 million uninsured in the individual market because of "significant premium increases," as well as other factors. 

“The Cruz Amendment would lead to fewer Americans with insurance in the individual market,” said Elizabeth Carpenter, senior vice president at Avalere. “In addition, individuals who want benefits that comply with Affordable Care Act standards would see premiums increase significantly.”

People who receive ObamaCare subsidies will largely be protected from premium increases because the subsidies are designed to increase with premiums. 

Avalere also notes that the state stability fund in the GOP bill mitigates premium increases somewhat, from 86 percent without that funding to 39 percent. 

The Senate will vote on a motion to proceed to a healthcare bill Tuesday, but it's not clear if it's to the repeal bill Congress passed in 2015 or the repeal and replace measure Republicans have been working on, which includes the Cruz amendment.