The Cruz Amendment Would Gut Protections for Pre-Existing Conditions

Tom Williams/Congressional Quarterly/Newscom via ZUMA

The latest health care hotness from Republicans is the Cruz Amendment. Official text hasn’t been released yet, but the basic idea is simple: it would allow states to reduce the essential benefits guaranteed by Obamacare as long as every insurer offered at least one plan that covered everything. It’s worth making clear exactly what this would accomplish.

Let’s use an extreme example to make it easy to see. Suppose an insurer offers two policies:

  • Policy A doesn’t cover cancer or pregnancy or heart attacks or diabetes or prescription drugs that cost more than $100 per month.
  • Policy B covers everything.

What happens? Nearly everyone who’s pretty healthy buys Policy A, because it’s much cheaper. Everyone who’s pregnant or over 50 or already sick has to buy Policy B, which would be astronomically expensive. And that’s the end of our example. Pretty simple, isn’t it?

If you have a pool of people who are all, almost by definition, either old or sick with expensive illnesses, premiums for that group are going to be enormous. Maybe $10,000. Maybe $20,000. In theory, the poor could still afford this since the Senate bill includes subsidies similar to Obamacare’s, but in reality these policies would have very high deductibles, making them prohibitive even for low-income workers. In other words, without actually saying that pre-existing conditions aren’t covered, the Cruz Amendment effectively means that pre-existing conditions aren’t covered.

This is not controversial. Conservatives understand it as well as liberals do.

The Cruz Amendment is one of those things that sounds like a good “compromise” to people who care only about politics. Some senators want cheap premiums. Some senators want full coverage. The Cruz Amendment has something for everyone! But to anyone who knows or cares about health care, it’s no compromise at all. It’s just something that would make a bad plan even worse without helping much of anyone.