Authored by Jim Stinson | 08 Mar 2017 at 5:22 AM

After years of voting to repeal the Affordable Care Act, congressional Republicans are stumbling now that they have majorities in Congress as well as a chief executive ready to sign their bill. After weeks of behind-the-scenes bill-writing, House Republicans released their long-awaited repeal bill of the ACA, aka Obamacare, late on Monday. The bill — known as the American Health Care Act — was, admittedly, only one part of a three-step process.

It faced massive opposition from both the moderate and conservative wings of the GOP almost immediately. Moderates howled over the draw-down of Medicaid expansion in the leadership bill. Conservatives slammed how much of the original law would be left in place, the lack of movement on key free market promises, and new provisions seen as expanding government control over the health care system.

What now to do in 2017 depends on which Republican you ask. Members of President Donald Trump’s administration and House Republican leadership will say this bill has a way forward and that repeal and health care reform cannot be done at once.

Conservative congressional members and activist groups believe full and unconditional repeal is an immediate must.

“Clean Repeal

/* */


On Tuesday afternoon, the House Republican bill was panned by conservatives long waiting for repeal of the hated Obamacare, passed in 2010. At a gathering of conservative Republican senators and representatives outside the Capitol Tuesday, elected officials took turns beating the proposed repeal-and-replace bill.

“There’s the leadership plan that was brought forward, which I believe, when you look through it, is Obamacare in a different form,” said Rep. Jim Jordan (R-Ohio), the former chairman of the conservative House Freedom Caucus.

“This is … a step in the wrong direction,” said Sen. Mike Lee (R-Utah).

A common refrain at the Freedom Caucus press conference with Sens. Rand Paul (R-Ky.) and Lee was a question about repeal in 2015. Why couldn’t the Republican Congress simply vote for repeal, as they did in December 2015, when every GOP member of Congress voted to yank Obamacare in whole? Paul called it “clean repeal.” Addressing all of the issues that Paul and other Republicans want in a “clean repeal” may not be possible. Republicans don’t have the 60 votes needed in the Senate to move forward.

Republicans have 52 seats in the Senate. They would need eight Democrats to move forward with a repeal-and-replace option outside of the process known as reconciliation.

“The bill that goes through reconciliation and only requires 50 votes in the Senate in order to pass,” said Tom Price, secretary of Health and Human Services, during an interview Tuesday on “The Laura Ingraham Show.”

“There’s some things that you can do in that and there’s some that you can’t do just because of the rules,” Price said. “I know that’s a process argument, but that’s the truth.”

Three Steps 

And it is the truth. One health care policy expert who has concerns about the Republican first draft told LifeZette that the first phase has to contain all the things that can be done via budget reconciliation, which only needs 51 Senate votes.

The next step, the second phase, would be Price’s move. As HHS secretary, Price will exercise his power to affect up to 1,400 health care regulations, as empowered by the law.

The final step, according to House Speaker Paul Ryan (R-Wis.), would be a second bill, with items that can be filibustered because of their nature. The “Phase 3” bill will be moved almost simultaneously with the American Health Care Act, Ryan explained in a Tuesday afternoon press conference with House Majority Leader Kevin McCarthy (R-Calif.).

One big item in this secondary bill will be a favorite of President Donald Trump and many conservative groups: It will allow the purchase of health insurance beyond a customer’s state lines. Unlike automobile insurance, health plan customers have been confined to the state in which they live. Opponents of the current draft think that provision can be added now.

“Such an injection of competition would lead to hundreds of billions of dollars in savings, nullifying any argument by congressional Republicans that this provision cannot be included in the current bill,” said Club for Growth President David McIntosh in a statement.

Conservatives also expressed concern that a number of taxes and mandates (although not the hated “individual mandate”) are left in place.

Republicans should be offering a full and immediate repeal of Obamacare’s taxes, regulations, and mandates, an end to the Medicaid expansion, and inclusion of free-market reforms, like interstate competition,” said McIntosh.

The Heritage Foundation’s political arm, Heritage Action, has also blasted the current draft in a statement.

“If Republicans move forward with this bill, they will be accepting the flawed premises of Obamacare,” said Heritage Action CEO Michael A. Needham. “Instead, they should fully repeal the failed law and begin a genuine effort to follow through on their seven-year promises to create a free market health care system.”

Yet Paul, of all people, seems to realize the House bill is an “opening bid” from Ryan and Trump. Democrats have been dealt out. The only people needed to pass Phase 1 are the conservatives and libertarians like Paul, Lee, and Jordan.

This is the beginning of the negotiation,” said Paul, admitting Vice President Mike Pence has been contacting House Freedom Caucus members, and that Cabinet members have been setting up appointments with conservatives. “If they were to remove the objectionable items from their repeal and replace, it would essentially be [clean] repeal.”

That would be possible, since congressional Republicans and the administration have made clear the bill will be considered under regular order — a process that would allow the bill to be amended to win conservative votes.

I am getting tired of having to explain the same thing repeatedly. Every time I hear someone talk about buying health insurance across state lines, I know for a fact that they do not understand how selling health insurance works.

I sold health insurance for many years. Had to do coarse work, and pass a State Department of Insurance test in order to be approved to sell health insurance. I has to do additional coarse work and pass additional test to maintain my insurance license. So, I am offering the following simple explanation of how a health insurance company determines what a policy covers, cost, and pay claims. It is not exhaustive, but representative.

Every health insurance company uses the same formula to determine a premium payment for a policy they want to market. It begins with the actuarial. The actuarial provides the insurer the statistical calculations of risk for:

·        Age groups

·        Men, women, boy, girls

·        Claim activity in a given Zip Code

o   Includes pre existing conditions per Zip Code

·        Uninsured claims in hospital Emergency Rooms

·        Pharmaceutical purchases

·        Whatever else individual insurers want to know in order to determine premiums.

·        What are the cost associated with what that policy is going to cover.

·        And whatever else they need to know in order to determine what they are going to charge for a premium for that policy.

The insurer will then add for administrating the policy and earned commissions and you have a insurance premium.

Each state has their own Department of Insurance. Each DOI determines:

·        Which health insurance companies sell in their state

·        What each insurance company must offer in coverage

·        Mandated coverage of certain ailments, conditions, or events

·        What each company can sell, and cannot sell.

·        Each DOI determines what percentage of RISK each insurer must assume with each policy coverage and consideration. Yes, the insurers go into each issued policy with a determined level of risk for loss. MANDATORY.

·        Each DOI has their own risk pool offerings.

For illustration purposes, let’s assume the policy you desire (based on coverage) is $100.00 a month;

·        In the Zip Code next to yours, that same policy, same age, same sex, same coverage, same insurer could by $125.00 a month. Another Zip Code could be $75.00 a month.

·        In the next state that same policy, same age, sex, family, insurer could be $150.00 a month. Another state could be $50.00 a month.

The difference all started with the ZIP CODED ACTUARIAL. Now, you want to go to the cheaper state and buy that policy. Every state will tell you that you MUST LIVE IN THE ZIP CODE YOU ARE BUYING COVERAGE.

The only exception is GROUP POLICIES. Most allow you to get coverage with medical providers in other states (example long haul truck drivers).

So, the politicians who are telling you they want you to be able to buy “cheaper” policies in the next state, do not know what their talking about.

The next issue. You pay your $100.00 premium every month. After 12 months you have given them $1,200.00. If you never used your policy, great. But, if you did files a claim for $2,400.00, the insurer is bankrupt. In order to avoid that, insurance companies take a determined amount of your monthly premium and invest it into the market. As they get a Return on their Investment (ROI) they use THAT MONEY to pay your claims. So when you see the amount of assets an insurer has, know that they are well able to pay your claims, without increasing your premium.

When the state DOI creates more mandated coverage for pre-existing conditions, that means that they are taking more loss on a policy and risking their ROI to pay your claims. Every time an insurer is mandated to cover a pre existing condition, they are demanding they buy claims they have never received premiums, or ROI. That requires them to raise everyone’s premiums in order to cover those loses. If that market starts to go, and claims exceed risk, then the insurer can no long cover anyone’s claims. BANKRUPTCY. That is why so many insurers have had to pull out of OBAMACARE.

For my fellow health insurance agents who are screaming now that I have left something out, please forgive me and let me know. There are so many other issues associated with this like executive pay structures, type of policies, etc. This was not intended to be exhaustive.

Thank you for reading,

Jerry Broussard of