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Obamacare Repeal and Replace: Myth vs. Fact

Misinformation and political motivations are attempting to mislead us on the repeal and replace of Obamacare – especially in terms of pre-existing conditions which is firmly protected in the bill by guaranteeing no one can be denied coverage and benefits. Here are some of the myths about the legislation that are being spread and what the truth actually is:

MYTH: It guts access to health insurance and gets rid of protections for those with pre-existing conditions.

FACT: Nothing could be farther from the truth. The bill ensures that all Americans have access to affordable health insurance and maintains current law prohibitions that prevent insurance companies from denying or limiting coverage to patients based on a pre-existing condition.

MYTH: It will allow those with pre-existing conditions to be priced out of the market, effectively rendering those protections useless.

FACT: Americans have faced skyrocketing costs for Obamacare coverage, which has already created a financial hardship for many with pre-existing conditions, in some cases pricing them out of the market. In fact, average Obamacare premiums in North Carolina increased by 40 percent in 2017.

The bill includes a continuous coverage provision to encourage Americans to maintain their health insurance coverage. Under the legislation, if an individual allows their insurance coverage to lapse for more than 63 days, then insurance companies may assess a 30 percent surcharge for one year. This will help stabilize risk pools and keep premiums down for everyone by encouraging people to purchase insurance while they are young and healthy, rather than just signing up for coverage when they get sick and need expensive care.

If a state has a risk-sharing program in place to protect people with pre-existing conditions, the bill allows the state to seek a waiver from certain federal mandates. States could use the waiver to allow insurance companies to vary premiums based on health status for individuals who failed to maintain continuous coverage, in lieu of the arbitrary 30 percent surcharge. It also includes $8 billion for states to reduce premiums and other out-of-pocket costs for individuals in waiver states who failed to maintain continuous coverage. The legislation would not allow insurance companies to consider health status when setting premiums for any individual who maintained continuous coverage.

MYTH: It does away with critical “Essential Health Benefits,” such as coverage for maternity care or mental health care.

FACT: Obamacare mandates that all health insurance plans sold on the individual market must include coverage for ten categories of “essential health benefits.” Each essential health benefit is important to some individuals, but not every essential health benefit is important to every person. For example, a 55 year-old couple with no children does not need, and cannot use, coverage for pediatric care. Mandating a one-size-fits-all federal benefit package limits choice and drives up prices for most, forcing Americans to pay for coverage of all ten essential health benefits regardless of whether they require, desire, or can even use that coverage.

The bill allows states to seek a waiver from these federal requirements in order to define the level and content of essential health benefits that insurance companies are required to cover within that state’s borders. This increased flexibility would allow for a wider variety of plans to be offered at lower prices than if the federal mandates remained in place, and give insurance companies flexibility to tailor products to meet consumers’ specific needs. Further, increased marketplace competition resulting from an increase in the number of available plans should also reduce premiums. The legislation’s Patient and State Stability Fund also dedicates $15 billion for states to provide maternity coverage and newborn care, inpatient and outpatient care for mental illness, and early identification of mental health conditions in children.

MYTH: It would throw us back to the days where patients could be discriminated against based on their sex.

FACT: This is just wrong. The bill does not allow insurance companies to discriminate based on sex.

MYTH: Twenty-four million Americans will be kicked off their health care coverage under the plan.

FACT: This is not true. The bill would ensure every American has access to affordable, quality health care. The Congressional Budget Office (CBO), Congress’s official numbers cruncher and forecaster, did estimate that the plan would increase the number of uninsured people in the United States by 24 million in 2026. Projecting behavior and health insurance coverage in a competitive market is difficult, however, and CBO sometimes misses the mark.

For example, CBO’s assumption of the effects of Obamacare’s individual mandate, which compels every American to purchase Obamacare-compliant health insurance coverage or pay a penalty, is that it will yield much higher enrollment than has been the real world experience. In 2010, CBO projected that 21 million Americans would gain coverage under Obamacare by 2016. Actual enrollment was closer to ten million. The legislation would repeal the individual mandate, so that Americans would no longer be forced to buy insurance.