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A shocking new analysis from the Brookings Institution explains who 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 may also 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.)
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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