The new healthcare bill released Thursday contains a proposal by Sen. Ted Cruz, R-Texas, that state insurance regulators say reminds them of the "junk insurance" sold prior to the Affordable Care Act, The New York Times reported.
The proposal "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," trade associations America's Health Insurance Plans and BlueCross BlueShield Association wrote in a letter to the Senate.
Cruz's amendment, the "Consumer Freedom Option," would allow insurers offering Obamacare plans to also offer cheaper policies with less options as more of a safety net for individuals without pre-existing conditions to regain the affordable plans they enjoyed prior to the ACA. But cheaper plans pre-Obamacare meant a health plan with very basic coverage, such as a yearly checkup but no coverage of doctor visits, and very low premiums accompanied by five-figure deductibles.
Elizabeth Imholz, a health policy expert for Consumers Union, said the plan will leave consumers with "huge, unexpected out-of-pocket costs."
The plans are "just the classic example of insurance that disappears exactly when you need it," said Jay Angoff, a former state insurance official in Missouri and New Jersey.
Added Ashley Blackburn, a senior policy analyst with Community Catalyst, a consumer advocacy group: "These plans lacked the necessary transparency that would give consumers an idea of what they were actually purchasing."
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