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How Cassidy-Graham brings back preexisting conditions

Lindsey Graham

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The new Republican plan to repeal Obamacare would bring preexisting conditions back to the individual market, allowing insurers to charge sick people higher premiums — or deny them coverage outright.

"You can be charged more for a specific condition," says Chris Sloan, a senior manager at the health research firm Avalere, of the Cassidy-Graham plan that has begun to gain traction on Capitol Hill.

The new bill has been championed by its sponsors, Sens. Bill Cassidy (R-LA) and Lindsey Graham (R-SC), as giving states more flexibility in how they run their health care systems. One of those flexibilities includes a waiver system that would let states opt out of many key Obamacare regulations.

Those waivers do have some guardrails. The bill says states cannot tether an individual's premiums to "sex or membership in a protected class under the Constitution of the United States."

Anything else — a cancer diagnosis, a history of breast cancer, a mild case of asthma — is fair game. In states that did pursue and receive these waivers, health plans would have full authority to charge sicker patients higher premiums to offset their costs.

Cassidy argues that his plan would still protect people with preexisting conditions. It requires that any waiver application must include a description of "how the state intends to maintain adequate and affordable health insurance coverage for individuals with preexisting conditions."

"Knowing that states may want to experiment, we specify that in the waiver request they must have adequate and affordable coverage for those with preexisting conditions," Cassidy said in a briefing I attended last Friday.

Outside experts, however, question how strong these protections actually are. For one thing, there is no definition in the bill of what counts as "affordable" coverage. This would largely be left up to future bureaucrats in Washington to decide.

"You could stretch the definition pretty broadly of what counts," says Sloan. "Maybe you fund a high-risk pool that only allows in some number of people, and that counts. It's a pretty wide space."

What's more, that language does not outlaw discrimination against sick patients. An individual with a history of asthma, for example, could see health insurance plans that want to charge her 10 percent more because they expect she'll have higher health care costs.

Is that discrimination against a preexisting condition? Absolutely. Does it bar her from getting "affordable" coverage? We don't really know. That depends a lot on who that person is and what income they make.

The Affordable Care Act offers much clearer-cut outcomes for someone in that situation. An asthma patient wouldn't face higher premiums under current law. The Affordable Care Act also includes definitions, in law, of what's reasonable for an individual to spend on premiums given his or her income. It lays all of that out, so you can get a pretty good picture of what the individual market looks like under the law.

That doesn't exist in Cassidy-Graham. There aren't definitions of key terms like "adequate" or "affordable." There is a door swung open to an insurance market that discriminates against sicker patients, with few consumer protections to ensure those people get coverage.

Chart of the Day

The states that win and lose under Cassidy-Graham, mapped

David Anderson/Tableau

Texas wins big — and California loses — under the latest GOP health bill. Duke University's David Anderson maps how much federal funding states gain or lose under the Cassidy-Graham health plan, using data from the Center on Budget and Policy Priorities. See the interactive version here — and while you're at it, follow David for a wealth of sharp Twitter commentary here.

Kliff’s Notes

Your daily top health care reads, with research help from Caitlin Davis

Today's top news

  • "Arizona Governor Backs O’care Repeal, Likely Securing McCain’s And Flake’s Votes": "Arizona Gov. Doug Ducey (R) officially endorsed the Graham-Cassidy-Heller-Johnson bill Monday that would repeal much of the Affordable Care Act and convert Medicaid and Obamacare subsidy funding into block grants controlled by the states." —Alice Ollstein, Talking Points Memo
  • "Senate Dems issue a ‘red alert’ on Republican repeal efforts": “Senate Republicans only have 13 days remaining, including today, to pass the final iteration of their regressive health care plan, and most of the stakeholders continue to act as if the GOP crusade will fail. In recent days, Senate Democrats have become far less sanguine about the possibility.” —Steve Benen, MSNBC
  • "As Federal Government Cuts Obamacare Ads, Private Insurer Steps Up": “Open enrollment for Affordable Care Act insurance doesn't start for another six weeks. But the quirky insurance startup Oscar Health is launching an ad campaign Monday aimed at getting young people to enroll. The company is boosting its ad spending after the Trump administration announced it would slash its ACA advertising budget by 90 percent.” —Alison Kodjak, NPR

Analysis and longer reads

  • "Graham-Cassidy: A Closer Look At The Medicaid Provisions": "The newest version of Graham-Cassidy aims to create a system — at least in the short term — in which, via a new, temporary block grant, all states would receive some amount of federal resources to provide at least some level of coverage to certain populations who would be ineligible for Medicaid. But this short-term pooling arrangement appears to suffer from a number of significant limitations." —Sara Rosenbaum, Health Affairs
  • "After single payer failed, Vermont embarks on a big health care experiment": “Vermont is setting an ambitious goal of taking its alternative payment model statewide and applying it to 70 percent of insured state residents by 2022 which — if it works — could eventually lead to fundamental changes in how Americans pay for health care.” —Carolyn Y. Johnson, Washington Post
  • "Without Price Breaks, Rural Hospitals Struggle To Stock Costly, Lifesaving Drugs": “Unlike bigger hospitals, rural hospitals can’t get discounts on expensive drugs that treat rare diseases because of a last-minute exclusion written into the ACA. That seemingly minor detail in the law has left rural hospital pharmacists and health care workers struggling to keep medicines in stock, and wondering if they will be able to adequately care for patients.” —Sarah Jane Tribble, Kaiser Health News

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