The House Republicans’ CHOICE Act has been making headlines recently, signaling a shift in the political landscape of health insurance. This legislation aims to reduce health insurance costs for specific businesses and consumers, partly by rolling back some consumer protections established under the Affordable Care Act, commonly known as Obamacare.
A Subtle Shift from “Repeal and Replace”
The Republican rallying cry against the Affordable Care Act has long been “repeal and replace.” However, the CHOICE Act represents a subtler approach. Rather than an outright repeal, this effort could allow more employers to bypass the basic benefits requirements of the landmark health insurance overhaul and most state standards.
At the same time, the Biden administration seeks to undo some of the previous administration’s health insurance rules. They propose retightening regulations for short-term plans, which has drawn the attention of health policy experts.
Health Policy Experts Weigh In
Health policy experts are not surprised by these developments. Most GOP policy ideas have long drawn Republican support and have raised concern from Democrats about reduced consumer protections. Joseph Antos, a senior fellow at the American Enterprise Institute, a Washington, D.C.-based think tank, notes that the proposals hinge on one issue: the rising cost of health care. He argues that this problem is larger than the potential solutions offered by the CHOICE Act.
The CHOICE Arrangement Act: What is on the Table?
While the Biden administration’s proposed regulations on short-term plans are likely to take effect, the GOP’s House-passed legislation — dubbed the CHOICE Arrangement Act — is unlikely to win favor in the Democratic-controlled Senate. If Republicans were to retake the Senate and White House, though, it would illustrate the health policy direction they could take.
Short-term Plans: Less is Less
Short-term plans have been sold for decades, often as a stopgap for people between jobs. They can be far less expensive than more traditional coverage because short-term plans vary significantly in their coverage, from comprehensive policies to fairly minimal ones.
However, these plans can cover only some of the benefits required of ACA plans. They can bar coverage for preexisting medical conditions, set annual or lifetime limits, and often do not include maternity care or prescription drugs.
Association Health Plans and Self-Insurance
Meanwhile, the House-passed CHOICE Arrangement Act would allow more self-employed people and businesses to band together to buy Association Health Plans. Multiple employers purchase large group plans. They can be less expensive because they do not have to meet all ACA requirements, such as covering a specified set of benefits.
Another piece of the legislation would help more small employers self-insure, allowing them to bypass many ACA requirements and most state insurance rules. Both proposals represent a “chipping away at the foundation edges of the ACA structure,” according to some experts.
The Big Picture
These bills allow employers and insurance companies to get out from under the ACA standards and protections and offer cheaper insurance to younger and healthier employee groups. However, there are differing views on the impact of the legislation. Some see it as a threat to states’ authority to protect consumers and markets, while others view it as necessary improvements to the status quo.
What is the CHOICE Act?
The CHOICE Act is a piece of legislation advanced by House Republicans that aims to reduce health insurance costs for specific businesses and consumers, partly by rolling back some consumer protections established under the Affordable Care Act.
What are short-term plans?
Short-term plans are health insurance policies that offer coverage for a limited period, often used as a stopgap for people between jobs. They can be less expensive than traditional coverage but often offer less comprehensive benefits.
What are Association Health Plans?
Association Health Plans are large group plans purchased by multiple employers. The CHOICE Arrangement Act would allow more self-employed people and businesses to band together to buy these plans.
How does the CHOICE Act affect the Affordable Care Act?
The CHOICE Act could allow more employers to bypass the basic benefits requirements of the Affordable Care Act and most state standards. It represents a shift from the “repeal and replace” approach to a subtler effort to modify the existing system.