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Ted Cruz Could Solve Key Problem With Senate Obamacare Bill

Republican Sen. Ted Cruz of Texas has an amendment to the Senate Obamacare repeal bill that would bring back the special high-risk pool for older, sicker consumers, a key feature that works to keep the Affordable Care Act solvent.

The House bill, passed in early-May, includes a high-risk pool for consumers with a history of serious illness. The Senate bill, unveiled in mid-June, does not include a high-risk pool, but rather requires that consumers be covered by the same kind of insurance and be charged the same rate as similarly-aged individuals. (RELATED: The One Significant Change To The Senate Health Care Bill)

The amendment, known as “Consumer Choice,” allows insurers to sell plans that do not follow regulations created under Obamacare for patients with pre-existing conditions, with the caveat that insurers have to sell at least one plan that adheres to Obamacare’s mandates. The proposal would allow insurers to sell cheaper plans with fewer benefits. (RELATED: White House Backs Free Market Amendment To Obamacare)

Insurance experts predict the Cruz amendment would effectively create a high-risk pool through incentivising customers with a history of health problems to purchase insurance in one marketplace and healthier consumers to purchase insurance in another, The New York Times reports. Effectively, the amendment would create a pool of at-risk insurees in the same marketplace.

White House legislative affairs director Marc Short suggested Sunday that the administration is in favor of an amendment.

Under the amendment, consumers who choose to purchase Obamacare plans would be eligible for subsidies if they make less than $42,000 a year. Subsidies for Obamacare-compliant plans would be unlimited and fluctuate relative to the costs of health care. Consumers would also have the option of opting out of the healthier marketplace when and if they get sick.

There is some concern that, say, a middle-class American could afford insurance on either marketplace if they got sick or had a pre-existing condition.

A middle-class individual with a pre-existing condition who is also making over the $42,000 threshold may be barred from purchasing insurance on the non-compliant, healthier insurance marketplace, because the cost of obtaining insurance without subsidies could be too onerous. At the same time, the Obamacare-compliant insurance marketplace is likely to experience premium increases as high as 20 percent in 2018, which could also be prohibitive to many consumers.

The Cruz amendment does help to solve one of the major political hurdles for Republican lawmakers. It soothes both conservative concerns for a more free market approach and moderates who want to see pre-existing conditions covered in insurance plans.

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