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AP Photo/Pablo Martinez Monsivais

The fate of the Senate's health care bill might rest on a debate that hardly anyone seems to fully understand. It's all centered on a provision Sen. Ted Cruz added to the bill, which would let insurance companies sell plans that don't comply with the Affordable Care Act's insurance rules, as long as they also sell plans that do meet those requirements.

Cruz's amendment requires insurance companies to pool both sets of plans together when setting the premiums for each one. But that could be a deal-breaker for Sen. Mike Lee — he's not sure he can support the bill unless this single risk pool is broken up. Policy experts, meanwhile, aren't sure whether that would make much of a difference, or how all this would even work.

Why this matters: This is why complicated healthy policy ideas are generally publicly scrutinized for weeks — if not months — before they have a shot at becoming law. If the GOP health bill passes the Senate next week, there's a good chance no one will fully understand its effects until they begin to happen.

What the Cruz amendment does: It would allow insurers offering ACA-compliant plans to also offer plans that don't comply with the law's insurance regulations — including the rules dealing with pre-existing conditions and essential health benefits. Because of a compromise with Sen. Bill Cassidy, both sets of plans would be part of the same risk pool. At least in theory, that means the healthier people in the non-compliant plans and the sicker people in compliant plans would balance out each other's premiums.

But that subsidy from the healthy to the sick is exactly what the GOP bill, including the Cruz amendment, is trying to roll back. So some conservatives, like Lee, want to separate the two sets of consumers. Moderates, meanwhile, seem to have been placated by the single risk pool without any great reasons to be: The Cruz amendment would still chip away at the ACA"s protections for pre-existing conditions, which, once upon a time, moderates said they'd firmly oppose.

Making this even more complicated, most of the policy experts I talked to said there wouldn't be much practical difference between a single risk pool or separate risk pools for each type of plan. They're largely avoiding definitive predictions, though, because the policy is so confusing.

  • Michael Cannon of the Cato Institute is the main voice saying a single risk pool is bad, because premiums for both compliant and noncompliant plans would rise together.
  • "I don't think it's exactly rise together, but the rise [in premiums] of the ACA-compliant plans would impact the rise of the skinny plans," said Dave Dillon, a fellow of the Society of Actuaries.
  • But Larry Levitt, vice president of the Kaiser Family Foundation, told me that "there are all kinds of ways around this."
  • Chris Jacobs, another conservative policy wonk, said chaining the two types of plans could create a situation that is the worst of both worlds: It would segment the individual market, but if the sicker segment's insurance plans slip into a death spiral, they could pull the skimpier plans down with them.
  • Levitt and other experts told me that because there is no risk adjustment under the bill — which would transfer funds from plans with cheap, healthy enrollees to those with sick, expensive ones — there's no real mechanism to enforce the requirement for a single risk pool. "I think it creates a single risk pool in name only. In practice, there would be segregated pools," Levitt said.

Yes, but: Doug Holtz-Eakin, a former director of the Congressional Budget Office, said he thinks that under the Cruz amendment, "you'll have a legal single risk pool that'll have within it two economically separate sub-pools." But that isn't necessarily a bad thing, he said: "You might end up in a relatively stable world where you've got this off-exchange world and essentially a de facto high-risk pool as the exchange."

Then again, maybe it would be bad: Here's the American Academy of Actuaries: "Rather than having a single risk pool, in which costs are spread broadly, there would be in effect two risk pools—one for ACA-compliant coverage and one for noncompliant coverage. As a result, average premiums for ACA-compliant coverage could far exceed those of noncompliant coverage, thereby destabilizing the market for compliant coverage. "

Go deeper

17 mins ago - World

Iran to enrich uranium to 60% in response to apparent Israeli attack

Supreme Leader Ali Khamanei. Photo: Iranian Leader Press Office via Getty

Iran has informed the director general of the International Atomic Energy Agency (IAEA) that it will begin 60% uranium enrichment, Deputy Foreign Minister Abbas Araghchi told reporters as he arrived to Vienna on Tuesday for a second round of nuclear talks.

Why it matters: This will be Iran's most severe violation of the 2015 nuclear deal since the Trump administration withdrew from the agreement in 2018. It's also a serious blow to the ongoing efforts to salvage the deal.

25 mins ago - Health

White House says J&J pause will not have "significant impact" on vaccination plan

Biden at the White Houe on April 6. Photo: Oliver Contreras/Sipa/Bloomberg via Getty Images

The White House said Tuesday that the FDA's recommendation that the U.S. pause use of Johnson & Johnson's COVID-19 vaccine "will not have a significant impact" on the administration's vaccination plans.

Why it matters: The Biden administration says it has secured enough Moderna and Pfizer doses for 300 million Americans. The U.S. will be able to continue administering 3 million vaccine doses a day even without the Johnson & Johnson shot, according to the White House.

2 hours ago - Technology

Microsoft looks to leapfrog Big Tech competitors with major acquisitions

Data: CB Insights; Chart: Andrew Witherspoon/Axios

Microsoft is trying to leapfrog competitors like Google and Amazon as they face record antitrust scrutiny.

The big picture: The deals Microsoft has been eyeing are larger than its usual targets and bigger than those of its competitors.