Patients’ Choice Act-Title II State Based Exchanges

The Patients’ Choice Act (PCA) represents Rep. Paul Ryan’s vision for what “replace” would look like for two-thirds of all Americans (160 Million now privately insured, and 50 million uninsured) if the Affordable Care Act were repealed. I am going to write a series of posts on the various Titles, or sections, of the bill. Past posts on the PCA:

This post looks at Title II of the PCA-State-Based Health Care Exchanges (pp. 18-26).

  • Sec 202 (b) (p. 20). Benefit Parity with Members of Congress. This section does not guarantee that all Americans will get the same type of health insurance enjoyed by members of Congress, at least not at the same price. I read the text as saying that states cannot mandate different benefit levels than those enjoyed by Congress, however, there is no limit to the premium or cost sharing that can be charged for these benefits (see Sec 202 (a)(4) p. 20). Further, the amount of the tax credit provided by the PCA ($5,710 for family coverage; $2,290 for individual, p. 28) is far below the cost of a typical private insurance policy, much less what is provided to members of Congress. The federal employees health plan provides a guaranteed percentage of the premium cost for plans regardless of what they cost, which the PCA does not do. In fact, the meta point of the PCA is to move away from a guaranteed amount of insurance coverage in favor of a defined federal contribution.
  • Sec 202 (c)(1) (p.21). Automatic enrollment procedures that are designed to get persons covered by health insurance are envisioned, and the phrase “universal” is invoked on line 1 of p. 21 even if some supporters are leery of such lingo. Settings/mechanisms for auto enrollment into health insurance mentioned include ERs, submission of state tax forms, workplaces, and state dept of motor vehicles offices, such as when people renew their drivers license. This subsection lays out other procedures designed to aid in enrollment, such as having open enrollment periods and specifies that all individuals can sign up for a plan so long as they agree to pay the premiums and cost share amounts. Sec 202 (c)(5) allows individuals to opt-out of health insurance.
  • Sec 202 (c)(4)(p. 22). Limitations of Pre-Existing Condition Exclusions. This section reads in full “The State Exchange shall ensure that health insurance coverage offered through the Exchange meets the requirements of section 9801 of the Internal Revenue Code of 1986 in the same manner as if such coverage was a group plan.” This places limits on pre-existing conditions, but does not ban them for policies sold in exchanges (exclusions limited to 6 months prior to enrollment to 12 months after).
  • Sec 202 (d)(1- 2)(p.22-25). Limitation on Exorbitant Premiums. Exchanges are directed to develop ways of protecting enrollees from “imposition of excessive premiums” and potential mechanisms include risk adjustment by a state-based board, high risk pools, reinsurance and interstate compacts. To fully evaluate these proposals requires far greater detail, like what would be expected if the relevant House committees marked up the PCA which must happen for this to ever become law. Then CBO could weigh in.

The PCA is a serious proposal that remains incomplete; many details are needed to make a full comparison with the Affordable Care Act possible. Reflecting on Title II, my biggest question is:

  • how different would aggressive auto enroll procedures be from the relatively weak penalty for not being insured contained in the Affordable Care Act in terms of insurance coverage attained? I sure would like to know what the CBO thought.

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