Six-month insurance lockout penalty added to Senate ACA repeal bill

Four days after they first replaced it publicly, Senate Republicans have made a change to their version on Affordable Care Act repeal-and-replace legislation, adding a “continuous coverage” provision to try and discourage people from canceling their insurance plans.

Under the added provision, if an individual market customer let their coverage lapse for 63 days or more, they would be barred from buying any policy on the market for six months. 

The original version of the Better Care Reconciliation Act (BCRA) contained no such requirement while still repealing the ACA’s individual mandate penalizing people who choose not to buy coverage. Without it, healthy individual market customers would have less incentive to stay covered and may purchase insurance only when they require care, potentially destabilizing the market. A former Republican healthcare advisor, Rodney Whitlock, cited the lack of any continuous coverage requirement as one reason the legislation fit “the definition of a death spiral.”

The House-passed repeal-and-replace legislation, the Affordable Care Act, had a different mechanism: customers with at least 63-day lapse in coverage would have to pay a 30 percent premium surcharge every month for up to 12 months when they buy another plan on the individual market. The Kaiser Family Foundation said that provision may act as a “strong incentive” for healthy people to stay covered, while Avik Roy, president of the Foundation for Research on Equal Opportunity, called it a “recipe for adverse selection death spirals.”