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CA Department of Insurance

House GOP bill amendments guts essential health benefits

News: 2017 Press Release

For Release: March 23, 2017
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House GOP bill amendments guts essential health benefits
Freedom Caucus insists that insurers have freedom to sell junk insurance again
SACRAMENTO, Calif. — Commissioner Dave Jones issued the following statement regarding recent amendments to the House GOP Affordable Care Act repeal bill sought by the Freedom Caucus:

"The House GOP bill to repeal and replace the Affordable Care Act is simply devastating for the health of Americans. The House GOP bill results in 24 million Americans losing their health coverage, an increase in the price of health insurance and a decrease in benefits. If that was not bad enough, additional amendments were proposed to accelerate the huge tax breaks for the wealthy while cutting health care coverage even earlier for the poor. And now the Freedom Caucus proposes amendments gutting the requirement that health insurance cover essential benefits.

The new proposal from the conservative Freedom Caucus to eliminate all or some of the essential health benefits compromises the quality of coverage as well as the stability of the health insurance market. The original GOP proposal would deprive coverage to 24 million Americans, shift tens of billions of dollars in costs to states and increase costs for consumers. The newly proposed amendments magnify the House GOP bill's flaws by removing essential health benefits from health insurance coverage. After years of rallying against Obamacare and promising to repeal it, the GOP has concocted a proposal that is shortsighted, ill-conceived and dangerous to the health of people who need health insurance coverage and already have it today thanks to the Affordable Care Act. The House GOP is breaking its promise to protect people with pre-existing conditions who need their health plans to cover essential health benefits.

The consequences of this proposal are severe and will result in widespread pain and suffering. If essential health benefits are repealed, insureds may find themselves in emergency rooms without hospitalization coverage; people who have paid their premiums for years, might no longer have coverage for prescription medication; a parent with a child afflicted by a known health concern, for example, mental illness will be forced into a very expensive plan that has mental health coverage and prescription coverage. Further, insurers may or may not still offer these plans, but if they do, they will be extraordinarily expensive for the insured. Premiums for the limited number of plans with comprehensive coverage will increase, without tax credits increasing, and they will be out of reach for most Americans.

Many Californians rely upon prescription drug coverage on a daily basis. People with hemophilia or those who have had organ transplants need prescription drugs to survive. People with chronic conditions like HIV and autoimmune diseases need medication to keep their disease at bay. At the same time prescription drug costs are one of the biggest drivers of rate increases across the country. If insurers are not required to cover prescription drugs, they may simply choose to stop providing this benefit, forcing individuals to pay for coverage out-of-pocket. However, without coverage, individuals will likely forego adhering to their treatment regime due to the high cost of prescription drugs, ultimately leading to costlier medical issues down the road.

If essential health benefits are not covered, Californians with critical health problems like diabetes, cancer, or addiction would end up paying a substantially higher amount for their medical care if they can find comprehensive coverage at all. Healthy people would pay a lower amount but their policies wouldn't have much coverage if they become ill. These folks would be left in financial devastation should a health emergency or problem arise."

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Media Note:

The essential health benefits required to be covered by the Affordable Care Act include: ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance use disorder services, including behavioral health treatment, prescription drugs, rehabilitative and habilitative services and devices, laboratory services, preventive and wellness services and chronic disease management, and pediatric services, including oral and vision care.

The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $289 billion in premiums annually in California. Since 2011 the California Department of Insurance received more than 1,000,000 calls from consumers and helped recover over $469 million in claims and premiums. Please visit the Department of Insurance web site at Non-media inquiries should be directed to the Consumer Hotline at 800.927.HELP or 213.897.8921. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.

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