Insurers slam Ted Cruz health insurance proposal
US health insurance giants Blue Cross Blue Shield and America’s Health Insurance Plans have poured scorn on a provision, sponsored by Republican senator Ted Cruz, for the party's beleaguered health bill. The provision, known as the Consumer Freedom Option, would allow insurers to sell plans that did not carry the Affordable Care Act mandates, as long as they carried Obamacare-compliant plans too. In a rare joint letter to Senate leaders, the insurers said Cruz's proposal "creates two systems of insurance for healthy and sick people", and called it "simply unworkable in any form".

Big players in the insurance industry, which has mostly held back public criticism of the GOP’s Obamacare repeal push, eviscerated a Sen. Ted Cruz (R-TX)-sponsored provision that was included in the latest version of the Senate legislation.

“It is simply unworkable in any form and would undermine protections for those with pre-existing medical conditions, increase premiums and lead to widespread terminations of coverage for people currently enrolled in the individual market,” Blue Cross Blue Shield and America’s Health Insurance Plans said Friday in a rare joint letter to Senate leaders.

The Cruz proposal, known as the “Consumer Freedom Option,” would allow insurers to sell plans that would be free of many Affordable Care Act mandates if they were also selling Obamacare-compliant plans.

Insurers and outside health experts had already been raising their concerns with the idea when it was being discussed in the abstract, warning the it segment the market between healthy people choosing the non-compliant plans and sick people the comprehensive ACA ones. The insurers upped their complaints in the letter Friday.

“This would allow the new plans to ‘cherry pick’ only healthy people from the existing market making coverage unaffordable for the millions of people who need or want comprehensive coverage, including, for example, coverage for prescription drugs and mental health services,” the insurers said.

It had been an open question whether Senate GOP leaders would include the amendment in the base legislation they unveiled Thursday, with Cruz promising he would vote against it if it was not.

The Cruz language in the latest bill was placed in brackets to signify that it was still a work in progress, Senate aides said.

The insurers also bashed the details of the proposal that became clear after it was unveiled, including an apparent attempt of have the non-compliant plans and the ACA plans share a single risk pool.

“That is not the case. The Consumer Freedom Option establishes a ‘single risk pool’ in name only. In fact, it creates two systems of insurance for healthy and sick people,” the insurers said.

They said that the $70 billion added to the new draft to offset premium increases for the sick “is insufficient and additional funding will not make the provision workable for consumers or taxpayers.”

They went on to predict that the proposal “will lead to far fewer, if any, coverage options for consumers who purchase their plan in the individual market.”

“As a result, millions of more individuals will become uninsured,” the letter said.

One more GOP defection from the legislation, which already has two Senate Republican opponents, would kill it even before the Senate could advance it procedurally, in a vote slated for this coming week.

After the initial vote is taken to advance legislation, there will be an amendments process where the Cruz proposal could be struck, as insurers are urging. The parliamentarian may also find it violates Senate rules concerning the process the GOP is using to push the legislation.

Read the full Blue Cross Blue Shield/AHIP letter below: