Insurers do not like Ted Cruz's health care plan

President Donald Trump attends the Women in Healthcare panel hosted by Seema Verma, administrator of the Centers for Medicare & Medicaid Services at the White House in Washington DC

If people with pre-existing conditions are the only ones buying policies that have to cover pre-existing conditions, those policies will get pretty expensive - maybe prohibitively expensive.

Senate Republican leaders trying to resolve differences between moderates and conservatives ahead of a health care showdown are taking a close look at the proposal from Sens.

DeMint added that the Cruz-Lee amendment could save Americans from skyrocketing premiums. Vice President Mike Pence would cast the tiebreaker in the event of a 50-50 tie. According to government estimates, 5 percent of the population accounts for almost half of health care spending. Almost all of this population earns more than 350 percent above the federal poverty level - the cutoff point in the Senate bill for receiving federal subsidies to help purchase marketplace coverage. Ted Cruz would destabilize and fracture the individual insurance market.

The overall measure represents the Senate GOP's attempt to deliver on the party's promise to repeal President Barack Obama's health care law, which they've been pledging to do since its 2010 enactment. The amendment would allow insurance companies to offer healthcare plans that do not comply with Obamacare regulations as long as they offer plans that do comply with the Obamacare rules. Insurers could offer plans with reduced benefits, no maternity coverage, for example.

Although the Cruz/Lee amendment is dubbed the "consumer freedom option", Pollitz said the title is misleading. This means that you may still be subject to an Obamacare tax penalty if you purchase a fixed-indemnity insurance plan.

Additionally, Sen. Rand Paul (R-KY) indicated on Wednesday he was likely to vote against the revised bill, even with the Cruz-supported language. The Club for Growth, Tea Party Patriots, and FreedomWorks said that without an option for individuals to opt out of current insurance rules, the Senate bill would amount to perpetuating "Obamacare". Premiums for those who need comprehensive coverage would shoot up.

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But on Wednesday, the industry trade group America's Health Insurance Plans blasted the proposal, saying it would destabilize insurance markets and trigger a death spiral, a phenomenon in which enrollment sharply declines and insurers eventually stop offering coverage due to a situation known as "adverse selection".

Americans have been promised that Republicans would repeal Obamacare and when we have a Republican in the White House he would sign the bill and the deal would be done. Insurance expert Karen Pollitz, now with the nonpartisan Kaiser Family Foundation, said several states tried a similar approach in the past, and it didn't go well. But that would cause premiums to spike for those looking those who are sick and need more comprehensive policies.

Cruz says that doesn't have to happen. Those funds could be used to subsidize premiums for people with health problems.

The so-called Consumer Freedom amendment is considered contentious among Republican senators with some moderates having raised concerns that it could hurt those with pre-existing conditions.

In the days leading up the revised bill's unveiling, expected late Thursday morning, other Republicans were already throwing out suggestions to tweak Cruz's idea to make it more workable and appealing to the conference.

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