It was dismaying, although not surprising, to read in a recent Sunday LNP article (“How they voted,” July 29) that U.S. Rep. Lloyd Smucker had voted to block debate on a recent house bill that seeks to ban the sale of so-called “junk insurance” health care plans.
While voting against debate on House Res. 6479, Smucker voted in favor of another bill (House Res. 6311) that would grant owners of health savings accounts and seniors on Medicare Part A access to low-premium, high-deductible catastrophic plans.
Some explanation is in order.
U.S. Health and Human Services Secretary Alex Azar’s plan soon will allow the sale of non-Affordable Care Act-compliant “association” and “short-term” policies to small businesses and self-employed individuals. This would expand a little-known provision of the ACA that allowed such plans — but only for three months. These plans were designed for people who experienced the sort of short-term hardships that people sometimes go through, leaving them uninsured and subject to tax penalties. They were never designed to be a substitute for good health insurance policies.
Now the administration of President Donald Trump wants to extend these plans to 364 days — with an option to renew them for as long as 36 months.
It’s an option for people to purchase cheaper insurance; what could be wrong with that?
Well, plenty, in my view, and in the view of nearly everybody who knows about health care insurance. First, to state the obvious, insurance works because many people pay into the same insurance pool, thus spreading the risk. That means to some extent that healthy people subsidize the sick, but it also makes insurance affordable.
Imagine car insurance: It can be annoying to know when you pay your monthly car insurance premium that you are subsidizing bad drivers, but this also means that good vehicle insurance is affordable. If it wasn’t, your chances of being involved in an auto accident with an uninsured person would be much greater.
Who do you think would migrate to health care plans that are much cheaper but offer much less coverage? Healthy people, clearly — leaving behind sicker, older people who could not afford to be without coverage.
These older and sicker people then would see their premiums rise as insurers would have to pay more for them, and in turn would charge everyone higher premiums. Remember that the ACA does not allow insurers to charge more for underlying health conditions. That only works because people of different risk levels get put into the same pool of the insured.
These plans are called “junk insurance” for a reason.
Even worse, these new, junky plans are exempt from provisions of the ACA that offer consumer protections that are broadly popular and effective. They typically offer no protection against the risk of bankruptcy on medical bills; instead, they cover just a limited number of doctor visits and days in the hospital with glaring gaps in coverage, huge out-of-pocket costs and comparatively low caps on total benefits. This is basically companies practicing risk avoidance — the consumer assumes the risk for major health care expenses, essentially making a wager that he or she won’t get sick.
I think we can remember the bad old days of insurance before “Obamacare,” when insurers were allowed to deny coverage based on “pre-existing conditions.” They also could impose caps on expenditures and suddenly deny coverage in the middle of a major illness by “rescission,” which meant they could use any error — no matter how small or trivial — as an excuse to halt coverage.
Most experts in bankruptcy law say the major reasons people go bankrupt are illness and unaffordable medical bills; a rise in the use of junk insurance all but guarantees we will see more ruined lives.
This is not accidental. This is a matter of ill intent — and not on the part of insurers. Indeed, two major insurance groups are on record as opposing junk insurance plans because they make the health care market unworkable. They sent an open letter to U.S. Senate Majority Leader Mitch McConnell stating exactly that.
Instead, the constraints on junk insurance are being loosened by a Republican president and lawmakers seemingly hell-bent on undoing the ACA any way they can, and trying to take health care from millions of Americans.
Having failed at outright “Obamacare” repeal, they are trying to insidiously sabotage the way people get health care and render it unworkable so people will be more accepting the next time they try to repeal the law. Which is an effort Smucker is on record as supporting.
It is thus not surprising at all that he was in favor of killing this attempt by Democrats to ban junk insurance. This debate-squelching vote was an exercise of bad faith aimed at weakening the protections provided by the Affordable Care Act. And he went along with it.
Chet A. Morrison, M.D, FACS, FCCM, is an attending trauma surgeon at Penn Medicine Lancaster General Health and adjunct associate professor of surgery at the University of Pennsylvania. These are his views, not those of his employer.