July 10, 2017

Why is it every time one of these wingnut Republican politicians wants to sell a really horrible idea to their gullible voters, they feel they've got to slap the word "freedom" on the title? Sen. Ted Cruz made an appearance on ABC's This Week and discussed he and Mitch McConnell's latest efforts to find fifty votes in the Senate for their godawful ACA repeal bill.

Here's the problem with Cruz's so-called "Consumer Freedom Option" they're hoping will bring along enough of them to possibly get it passed before the August recess: Ted Cruz's Obamacare repeal plan would cripple the market say experts:

Texas Senator Ted Cruz thinks he can break the Obamacare repeal logjam in the Senate.

His solution, which is being touted as a "Consumer Freedom Option," would allow insurers that sell Obamacare policies to also offer skimpier plans.

One set of policies would contain all of the Obamacare protections, including covering those with pre-existing conditions, offering all 10 essential health benefits and limiting consumers' financial exposure.

The other plans would not have to adhere to these rules, allowing them to offer less comprehensive policies at a cheaper price. [...]

Cruz's idea has been praised by conservative lawmakers and lobbying groups as a way to lower premiums and increase consumers' options. It might entice more senators to support the legislation.

"It is encouraging to see Senate leadership exploring the merits of serious proposals that would inject much-needed consumer choice and competition into an otherwise deteriorating market," said Michael Needham, CEO of Heritage Action.

But its inclusion risks alienating moderates further. Maine Senator Susan Collins told Bloomberg News last week that she feared it would weaken consumer protections and hurt those with pre-existing conditions.

Health policy experts agree, saying it would split the individual market in two. Healthier people would gravitate to the non-Obamacare plans since they don't need -- and don't want to pay for -- a sweeping set of benefits.

That would leave all the sicker consumers clustered in the Obamacare plans, which would send premiums skyrocketing. That would likely drive out all but the most seriously ill, which would push rates even higher, possibly prompting some insurers to leave.

"If there were a Joy of Cooking for insurance, this would be the perfect recipe for destabilizing the market and turning the marketplaces into high-risk pools," said Larry Levitt, senior vice president at the Kaiser Family Foundation.

Separating the sick and the healthy is "not the best path forward," said Ceci Connolly, CEO of Alliance of Community Health Plans, a lobbying group for non-profit, community-based insurers. Instead, it's better to spread the risk around in a larger pools of enrollees.

The Cruz option would do the opposite.

"You are increasing the likelihood that there will be some smaller, sicker group with higher rates," Connolly said. "That's what you want to get away from."

Cruz was asked about the issues with the amendment during his interview on ABC, and of course denied that it would collapse the markets, complained about how unfair it is to ask younger people to pay higher premiums to pay for older, sicker individuals, and lied about whether there was enough money in the fund (there's not) for those with pre-existing conditions to stabilize the premiums.

STEPHANOPOULOS: As you know, this could be an uphill fight with some of your colleagues, including Senator Chuck Grassley of Iowa. What it is going to mean for coverage of pre-existing conditions. Here's what he said to Iowa public radio about your proposal.


SEN. CHUCK GRASSLEY (R), IOWA: There's a real feeling that that's subterfuge to get around preexisting conditions. And if it is, in fact, subterfuge, and it has the effect of annihilating the preexisting conditions requirement that we have in the existing bill, then obviously I would object to that.


STEPHANOPOULOS: What do you say to Senator Grassley.

CRUZ: Well, look, I think we are making steady progress and I think the conversations have been collaborative and in good faith.

You know, I don't think we should be deceived by Chuck Schumer and his attacks and misstatements.

STEPHANOPOULOS: But that's Chuck Grassley, not Chuck Schumer.

CRUZ: I understand that, but what's being repeat there is what Schumer said this week which is that he called it a hoax. And listen, Chuck Schumer and Barack Obama know a lot about health care hoaxes. They sold Obamacare saying if you like your plan you can keep your plan, that wasn't true. If you like your doctor, you can keep your doctor. That wasn't true.

They promised the average family their premiums would drop $2,500 a year under Obamacare. That wasn't true. In fact, their premiums have sky rocketed.

When it comes to preexisting conditions, the consumer freedom amendment was designed to be a compromise, to bring together both conservatives and moderates to unify the party. How does it do that? Because it maintains preexisting conditions protections. It is predicated on plans being offered that meet every one of the mandates, including preexisting conditions. So it doesn't take away anything that people have right now.

STEPHANOPUOLOS: But let me just stop you there.

CRUZ: All it does is it adds new options.

STEPHANOPOULOS: Let me stop you, because it requires only one plan in the state have that basic benefit package. And you know what the concern is of many health care analysts. They say that plan that, you know, the healthy and wealthier people are going to take the low cost plans. They're all going to flood in to the low cost plans, leave a high risk pool for those who actually have serious health problems, premiums, deductibles are going to skyrocket in that pool, make it unaffordable.

CRUZ: OK, so let's talk about how that would operate. That's an understandable policy concern. And I think it's right that you would see some market segmentation. You would see some younger and healthier consumers choose to go to freedom plans that have much lower premiums. And the argument that you're laying out is, well, gosh, with that drive up premiums on the Title 1 plan. I don't believe it would for two reasons. Number one, for the people getting the freedom plans you'd see a massive decrease in premiums. That's a lot of people getting benefit. But for the people still on the Title 1 exchanges, we've got two major sources of taxpayer revenue -- the first are the tax credits, the second are over $100 billion of stabilization funds.

And, George, the question really here is how are we going to provide for, how are we going to provide assistance to, people with serious diseases, serious pre-existing conditions? There is widespread agreement in Congress there's going to be significant assistance.

Here's what Obamacare does. It takes tens of millions of young healthy people and it jacks up their premiums, it doubles or triples their premiums, and takes all that extra money not for them but uses it to cross-subsidize people who are sick. I don't think that's fair. I don't think that makes sense. I'd much rather use direct taxpayer funds. Let's use Warren Buffett's taxes and not some 30-year-old who's struggling and just beginning her career. Don't double her premiums to cross-subsidize other people. That's what Obamacare does. It's wildly unfair.

STEPHANOPOULOS: I think one of the issues is that people say you don't have enough money to subsidize middle class people; it'd only be going to low income.

But I do have to move on.

CRUZ: And, George, let me point out that that's not accurate. Because you've got two different sources of federal taxpayer funds on the exchanges. Number one, the tax credits that are keyed directly to premium prices. But number two, the Senate bill has over $100 billion in funds for the stabilization fund that are designed to stabilize those premiums. The objective has to be -- and I think the way we get this done is focus on lowering premiums. If we're lowering premiums, it's a win/win for everybody.

STEPHANOPOULOS: Right, I think the question is would that be enough?

But what happens -- I know you hope your amendment is going to work. What happens if it doesn't? it seems like we have two different paths being talked about right now. You've got Senator McConnell in Kentucky last week saying, listen, if this fails, you've got to go work with Democrats to shore up the insurance markets. You've got President Trump and Steve Mnuchin just saying, no, we should move to the repeal then replace option.

What's your answer?

CRUZ: I agree with the president, and indeed that's something Mike Lee and I both urged back in January. We pointed out that Congress has voted 40, 50, 60 times to repeal Obamacare. And Mike Lee and I both said, all right, let's start with the language in 2015 that just about every Republican voted for in both houses. Let's pass that, have it go into effect a year or two years from now, and then spend that time debating the replacement.

At the time, that proposal was rejected by leadership and the administration, but if we can't get this done right now, I agree with the president. Then let's honor the promise on repeal and spend more time to get it done.

But let me be clear, George, I believe we can get it done. I think there is an agreement. My objective for the last six months, helping lead the working group on health care, has been to reach consensus, to bring together and unify the Republican conference. And the way we do it is focusing like a laser. How do we lower premiums? The more we're lowering premiums, the better. And if a year from now, two years from now, three years from now, premiums continue to skyrocket, we will have failed. But if they go down, if health insurance is more affordable, that's a big win for everybody.

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