Axne Applauds House Passage of Bill to Protect Iowans with Pre-Existing Conditions

May 9, 2019
Press Release

WASHINGTON – Today, U.S. Rep. Cindy Axne applauded House passage of H.R. 986, the Protecting Americans with Pre-Existing Conditions Act of 2019. This legislation prevents insurance companies from skirting consumer protections covered by the Affordable Care Act.

“Forcing Iowans with pre-existing conditions to choose between unaffordable coverage or inadequate coverage is not an option. I’ve said from day one that the ACA isn’t perfect and that we need to lower the cost of health care and prescription drugs. But allowing insurance companies to drive up premiums for sick Iowans or deny coverage for essential health benefits is not the answer,” said Rep. Axne.

The bill prevents states from promoting the sale of “junk health care plans” which drive up costs for sick people and deny coverage for essential health benefits including hospitalization, prescription drugs, maternity and newborn care, mental health and substance use disorder services, and emergency care services.

“My husband and I had to sell belongings on eBay in order to cover medical bills when my second son was born. Providing coverage for maternity or newborn care should not be a choice for insurance companies. Nor should coverage for prescription drugs, hospital visits or mental health services. This bill prevents insurance companies from skirting protections that ensure every Iowan has access to affordable care and receives coverage for essential health benefits,” said Rep. Axne.

Background:

Section 1332 of the Affordable Care Act allows states to apply for waivers of certain ACA requirements only when the state has a more cost-effective solution to providing the same level of benefits, affordability and comprehensive coverage. The waivers were intended to encourage competition in the market and facilitate innovation at the state level, while maintaining the same level of consumer protections afforded under the ACA.   

However, the Trump Administration issued guidance that weakened the standard of care that states must meet in order to receive a waiver. Under the new guidance, states merely have to demonstrate that a comparable number of constituents will have “access” to coverage, as opposed to demonstrating the same level of affordability and comprehensiveness. This new standard allows states to approve the sale of cheap, inadequate health insurance plans that can eliminate coverage of pre-existing conditions, charge premiums based on health status, or reject patients altogether. Without this legislation, these waivers would ultimately drive up the cost of insurance – particularly on middle class families.  

Specifically, the new 1332 guidance:

  • Promotes plans that lack pre-existing conditions protections. The guidance states that the Administration will “consider favorably” state proposals that promote short-term plans and association health plans. In contrast to ACA plans, short-term plans can deny coverage or charge higher premiums based on people’s health status and pre-existing conditions. They also exclude coverage of any care related to a pre-existing condition. Both short-term and association health plans can charge far higher rates to older people than ACA plans can, and neither type of plan must cover the ACA’s essential health benefits. States would now be allowed to expand these plans and count them as coverage, so long as individuals have “access” to comprehensive coverage.
  • Raises health care costs. The guidance also allows states to direct ACA subsidies towards short-term plans and association health plans, which could seriously destabilize the risk pool for both Marketplace plans and ACA-compliant plans offered outside the Marketplaces. This would drive up premiums for individuals who need comprehensive coverage, and cause insurers to withdraw from the individual market.
  • Limits access to comprehensive coverage. Under the new guidance, states would have to merely show that as many individuals will have “access” to comprehensive coverage as under the ACA. Previously, states had to demonstrate that the waiver would enroll as many individuals in comprehensive coverage as under the ACA.
  • Reduces the benefits that plans cover. The new guidance would allow states to have fewer people enrolled in plans that provide essential health benefits (EHBs), like maternity coverage, mental health care, or prescription drugs. States must merely show that at least as many people will have “access” to comprehensive coverage — in other words, show that such coverage is available, even if far fewer people enroll in it.

 

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