Every Texan is neutral on Senate Bill 874. The bill extends the temporary authority in Texas Insurance Code (TIC) Ch. 1510 for another 2-years, similar to bills passed in the last two legislative session. TIC Ch. 1510 both recognizes an opportunity for states under the Affordable Care Act (ACA) – flexibility and federal funding available through “1332 waivers”—and the threat posed to the ACA’s preexisting condition protections by the lawsuit led by the Texas Attorney General. Extending temporary authority for the Texas Department of Insurance (TDI) to study and apply for a 1332 waiver is beneficial, though we do not advise implementing a waiver prior to 2023. SB 874 also grants a 2-year extension of authority for TDI to take initial steps to re-establish Texas’ pre-ACA “high-risk pool” or something “substantially similar” in the event the ACA is overturned by the courts. This would be an inadequate response if ACA protections for preexisting conditions are struck down. The old high risk pool did not provide a meaningful coverage option. It covered only about 28,000 Texans at its peak, premiums were generally twice the market rate, and treatment for preexisting conditions was excluded for some enrollees.
Read our full testimony here.