Insurers blast Senate health care provision as 'unworkable'

Here are the changes to the GOP health care bill
Here are the changes to the GOP health care bill

Insurers have blasted a new provision in the Senate health care plan as "unworkable," saying it would send premiums skyrocketing for those with pre-existing conditions and leave millions more people uninsured.

The provision -- a version of the Consumer Freedom Option pushed by Texas Senator Ted Cruz -- would give insurers more flexibility in the plans they offer in the individual market. It would allow those that sell Obamacare policies to also offer plans that don't adhere to all of the law's rules, including those that protect people with pre-existing conditions.

In an unusual joint effort, the nation's two major insurer lobbying groups wrote to Senate Majority Leader Mitch McConnell and Democratic Leader Charles Schumer to say they "strongly oppose" the provision. The amendment was included in a revised version of the plan unveiled on Thursday.

The statement, released late Friday night, marked the strongest stance the industry has taken in the Republicans' drive to repeal Obamacare this year.

Insurers have remained largely on the sidelines, even as doctor and hospital groups and consumer advocates have battled against the Republican bills in the House and Senate.

The Cruz amendment "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," wrote the CEOs of America's Health Insurance Plans and the BlueCross BlueShield Association.

Related: What's inside the Senate Republican health care bill

In the alternate plans, insurers could reject applicants or charge them more based on their health history. They could offer skimpier policies that don't offer maternity, mental health and prescription drugs. These plans would likely have cheaper premiums, but higher out-of-pocket charges for those who need health care services.

"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 CEOs wrote.

The revised Senate legislation would also provide an additional $70 billion to help lower premiums and shield insurers from high-cost patients, bringing the total to $182 billion. But insurers said that's not enough.

"The dedicated funding included in the bill to address the cost of plans that cover people with pre-existing medical conditions is insufficient and additional funding will not make the provision workable for consumers or taxpayers," the CEOs wrote.

Related: New Senate health care bill could still hurt the sick and the poor

The industry's stance poses yet another hurdle for McConnell, who has faced a slew of negative headlines this week about the bill. Lawmakers are waiting for the nonpartisan Congressional Budget Office's review early next week.

The Senate parliamentarian is also expected to decide next week whether the Cruz amendment adheres to the chamber's rules on reconciliation, which would requires only a simple majority for passage.

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