Sparta Report

Cruz Issues Ultimatum: Keep My Amendment or the Health Care Bill Dies

Well Ted Cruz has staked out his claim, if his amendment is stripped from the Senate Healthcare bill, he will not support it. His amendment allows insurance companies to sell insurance below the standards demanded by Obamacare as long as they offer one plan that complies.

As we stated yesterday, the Senate Healthcare bill has 50 confirmed “NO” votes right now. If Ted Cruz flips, or anyone else for that matter, the bill is dead.

But now the welfare queen insurance companies, who shilled for the original Obamacare bill, are ramping up their opposition to the Cruz grandstanding amendment. They claim this will set up a dysfunctional system and will push up rates over time on sicker individuals purchasing the more expensive Obamacare plans.

While this setup could offer healthy people less expensive policies, insurers and actuaries say it would likely prove dysfunctional over time, pushing up rates and reducing offerings for people buying the compliant plans.

In a letter sent Friday night to the Senate Republican and Democratic leadership, the two major associations representing health insurers, which don’t typically send such missives jointly, said the amendment “is simply unworkable in any form and would undermine protections for those with pre-existing medical conditions, increase premiums and lead to widespread terminations of coverage for people currently enrolled in the individual market.”

The fate of the bill is on a knife-edge. Two Republican Senators have already said they oppose it, and Senate Majority Leader Mitch McConnell (R., Ky.) cannot afford to lose any more Republicans to get the 50-vote majority the legislation needs to pass. Vice President Mike Pence would break any tie. No Democrats are expected to support the GOP bill.

The letter from America’s Health Insurance Plans and the Blue Cross Blue Shield Association may alarm moderate Republican senators who have pledged to protect coverage for people with pre-existing medical conditions. But on the other side, the provision’s inclusion has been vital in winning over Sen. Cruz, and it is supported by other conservatives, though some feel it doesn’t go far enough to wall off the healthier market from the sicker consumers’ costs.

In an interview, Sen. Cruz said the provision is essential to his support of the bill. He said his amendment “takes nothing away” and would help millions of people by allowing them to buy lower-cost coverage, including with pretax dollars from health savings accounts, which in turn would boost insurance pools overall.

The noncompliant plans sold under the Cruz amendment could be more limited than today’s ACA coverage, lacking benefits such as maternity care, and could feature higher out-of-pocket costs and potentially annual or lifetime limits on coverage, said Larry Levitt, a senior vice president at the Kaiser Family Foundation.

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