View all Articles
Commentary By Chris Pope

Scoring the Cruz Amendment

Health Affordable Care Act

Would Ted Cruz’s ‘Consumer Freedom Option’ lead to an insurance death spiral?

Last week, the Senate released a revised version of the Better Care Reconciliation Act, which included a “Consumer Freedom Option” proposed by Senator Ted Cruz (R., Texas). This would have repurposed the exchanges established by the Affordable Care Act as a safety net for low-income able-bodied individuals and those with pre-existing conditions, but allowed others seeking health insurance on the individual market to purchase plans exempt from the ACA’s costly regulatory mandates.

Various interest groups and liberal activists have alleged that Cruz’s proposal would lead to a death spiral on the exchange but have cited little hard data in support of this claim. Nor have they addressed the fact that most individuals remaining on the exchange would receive public subsidies, which insulate them from premium increases and would serve as an automatic stabilizer for the bulk of the risk pool.

The net consequences of the Cruz amendment are therefore the subject of substantial disagreement, stoked by fear-mongering from those with a stake in maintaining the status quo. This is usually where the Congressional Budget Office (CBO) brings light to the discussion, but they have insisted that the Cruz amendment will take them a month to score and so have remained silent.

Although the unprecedented interaction of many different factors would undoubtedly require a great deal of research to analyze in all its complexity, the CBO has developed many tools to assess changes to health-care policy and would be quite capable of producing a rough provisional estimate (with caveats and qualifications) at short notice if it wished to do so. CBO’s purpose is to inform the lawmaking process, and it is of little use if it refuses to yield any contribution until after the window for enacting legislation has closed.

Read the entire piece here at National Review Online


Chris Pope is a senior fellow at the Manhattan Institute and author of “How Per-Capita Spending Caps Can Help Advance Equity in Medicaid.”

This piece originally appeared in National Review Online