Medicaid group pans key insurance provision of Senate GOP bill

Medicaid group pans key insurance provision of Senate GOP bill
© Getty Images

A provision in the Senate GOP’s ObamaCare repeal bill that would penalize people for being uninsured wouldn’t be enough to prevent a “death spiral” in the insurance marketplace, according to safety-net insurance plans.

In a letter sent Monday to Senate Republican leaders, the Association for Community Affiliated Plans (ACAP) said the bill’s six-month “lockout” provision won’t be enough of an incentive “for consumers who otherwise would not purchase coverage.”

“The possibility of an additional 6 months ... is not enough to change the calculus for someone who is generally healthy and willing to risk waiting until the next open enrollment period,” ACAP wrote. “[T]his provision is not enough to prevent the ‘death-spiral’ that is sure to otherwise occur if the BCRA is implemented.”

The Senate bill would make those who had a lapse in coverage for 63 days or more wait six months before obtaining insurance. The provision addresses concerns that people would only sign up for health coverage when they’re sick if insurers can't deny coverage for pre-existing conditions.  

The policy was added to the legislation as a way to prevent a "death spiral" in insurance markets. Experts have long warned that only sick people buying insurance would lead to massive premiums and the destabilization, and eventual collapse, of the individual insurance markets.

ACAP represents Medicaid plans that have more than 20 million enrollees in 29 states. The group previously said it opposed the Senate’s legislation because of the “massive cuts to federal Medicaid funding.”

Last month, ACAP launched a seven-figure ad buy urging GOP senators from swing states to oppose the bill’s Medicaid cuts.

According to the group, the six-month penalty “may do a little around the edges to ensure continuous coverage ... it will do little to incentivize currently uninsured consumers, especially those that are young and healthy, to purchase coverage and thus do little to balance the risk pool.”