By Tyler Musialowski and Matthew Langston
State Sen. Dan Bishop, the Republican candidate in the special election for North Carolina’s 9th Congressional District, has been repeatedly criticized by his Democratic opponent Dan McCready and other outside groups for his record on health care. Bishop has cited his support of SB 86, also known as the Small Business Health Care Act, to combat those attacks.
Senate Bill 86, a bill of which Bishop was a primary sponsor, was officially passed by the Senate on Aug. 14 and then sent to Democratic Gov. Roy Cooper on Aug. 15.
The bill was originally passed in the Senate on March 14 and then sent to the House, where the final amended version of the bill was passed on Aug. 7.
SB 86 would allow small businesses, real estate agents, and others with statewide trade groups to band together and set up cheaper health insurance plans that are not required to meet all the federal requirements of the Affordable Care Act. These plans are often known as association health plans.
The Bishop campaign sent out a news release on Aug. 14 following the ratification of SB 86, titled “Bishop Helps Secure Cost-Effective Health Insurance for Small Businesses,” in which Bishop speaks glowingly of the bipartisan supported legislation.
In the same release, Bishop criticized McCready, calling him “out-of-touch” for opposing the bill, even though it had what Bishop called widespread Democratic support.
McCready then took to his Twitter account on Aug. 15 for a response to Bishop.
State Sen @jdanbishop voted to deny coverage for NCians with pre-existing conditions (https://t.co/gEK0DJGj57). @jdanbishop is this cause you’re funded by Big Pharma? Asking for a friend.. #nc09 #ncpol
— Dan McCready (@McCreadyForNC) August 15, 2019
Following its ratification, SB 86 was sent to Gov. Cooper for him to sign or veto. Cooper ultimately chose to let the bill become law without his signature on Sunday, despite some reports that Cooper planned on vetoing the bill.
Cooper explained his decision, saying, “People have a right to be frustrated with the cost of private health insurance plans, but even though there is significant bipartisan support for this legislation, my concerns about the legality of these cheaper plans and their potential negative effects on health care prevent me from signing the bill.”
Cooper argued that Medicaid expansion would be a better way to reduce private health insurance costs, and he also expressed concern that association health plans would “take us back to a time when people can be discriminated against for pre-existing conditions in addition to driving up health care costs for everyone else.”
With SB 86 officially becoming law after Cooper’s decision, UNC FactCheck decided to investigate some of Bishop’s and McCready’s claims about the bill.
Bipartisan Support
As Bishop claimed, SB 86 did receive bipartisan support in both chambers of the General Assembly throughout its legislative history.
On March 14, the Senate passed the bill by a vote of 38-8, with support from 11 of 21 Democratic senators. When the bill was passed in the House on Aug. 7, it was by a vote of 82-32 in which 19 of the House’s 55 Democrats voted for it. Nine Democratic senators voted for the bill on Aug. 13; that was the bill’s final vote in the legislature before it was sent to the governor.
Coverage of Pre-Existing Conditions and Essential Health Benefits
The largest point of contention regarding SB 86 appears to stem from the bill’s language on the coverage of pre-existing conditions.
McCready initially claimed in a tweet on Aug. 8 that Bishop “double[d] down on removing coverage for people with pre-existing conditions” with his support for SB 86. He also said, “insurance companies don’t have to pay for medications for pre-existing conditions.”
McCready further blasted Bishop and association health plans in a series of tweets on Aug. 9. He started that series by accusing Bishop of voting to deny coverage for people with pre-existing conditions and included links to Bishop’s votes on two amendments to SB 86 as evidence.
McCready also promoted his own healthcare plan and included links to several news articles about association health plans, including one that said association health plans have a history of fraud.
McCready again addressed SB 86 in a pair of tweets on Aug. 17, saying “[insurance companies] have to take people with pre-existing conditions, but can refuse to pay for their medication…” and adding that “insurance [companies] don’t have to cover ‘essential health benefits’ like prescription drugs.”
This is where it becomes necessary to dig into SB 86’s legislative history.
Back in March, three amendments were proposed by Democrats when SB 86 first came up for a vote in the Senate. All three amendments were tabled by votes of 28-20, split directly along party lines. Every Republican, including Bishop, voted to table the amendments, while every Democrat voted against tabling the amendments.
The first proposed amendment would have required association health plans to provide coverage for the 10 essential health benefits that health insurance plans are mandated to cover under the Affordable Care Act. Part of what makes association health plans cheaper than regular insurance plans is that they are usually not required to provide as much coverage for things like essential health benefits.
That amendment would have required association health plans to cover the following benefits: ambulatory and outpatient services, emergency services, hospitalization, maternity and newborn care, mental health and substance use disorder services, prescription drugs, rehabilitative and habilitative services, laboratory services, preventive and wellness services, and chronic disease management and pediatric services.
The second proposed amendment would have prohibited certain risk factors from being used by insurance companies to determine rates for people on association health plans. The amendment would also have prohibited those same factors from being used in insurance policy allocations for “individual employees, employer members, and dependents of employees and employer members.”
Some of those risk factors included in the amendment were demographics like age and gender, geographic location, health status, and medical underwriting and screening.
The third proposed amendment was centered on efforts to close the Medicaid coverage gap by adopting Medicaid expansion under the Affordable Care Act. This amendment would have added a section to SB 86 that outlined expanded qualifications for Medicaid coverage and explicitly named the benefits available to those who qualify.
McCready’s claim that Bishop supported the removal of coverage from North Carolinians with pre-existing editions is misleading, since that suggests SB 86 specifically took something away from people when it did not. But McCready’s claim that Bishop voted to deny coverage for people with pre-existing conditions does have some merit, even if it lacks a bit of context.
It is important to note that the final version of the bill that was sent to the governor is different from the version that was originally approved in the Senate.
There were no specific references to pre-existing conditions in the original version of SB 86 or the second edition of the bill that was passed in the Senate and sent to the House. Despite the bill lacking any mention of pre-existing conditions and all three amendments for the bill being tabled, 11 Senate Democrats still voted in favor of the second edition of SB 86 on March 14.
The final version of SB 86 does say, “No limitations shall be based on preexisting conditions.”
This line about pre-existing conditions was not in the bill until it was amended in the House Committee on Health on June 27, which created the bill’s third edition.
The final version also says that association health plans are subject to the Affordable Care Act’s “group health plan” requirements and “cannot deny individuals coverage if they have preexisting conditions, cannot impose annual and lifetime limits on certain benefits, and must provide free access to certain preventative services.”
That section was added when the bill was amended in a House committee on Aug. 6, which created the bill’s fourth edition.
Bishop never explicitly voted to deny coverage for people with pre-existing conditions, but McCready pointed to Bishop’s vote to table the “risk factors” amendment as being “his vote against an amendment that prohibited the [association health] plans from discriminating against people with pre-existing conditions.”
It is accurate for McCready to claim that SB 86 does not require insurance companies to cover essential health benefits for people on association health plans. McCready also mentions that a person with heart disease or high blood pressure would be responsible for paying for the full cost of their prescription drugs if that benefit was not covered by their association health plan.
According to a Winston-Salem Journal article from March, Bishop said the inclusion of essential health benefits in SB 86 would “derail the entire [association health plan] platform in the state.”
Much of McCready’s focus is on the potential of association health plans to deny coverage for people with pre-existing conditions, since the plans are not required to cover things like essential health benefits. Without a requirement for such benefits, even those without pre-existing conditions may not receive the coverage they need under an association health plan.
Valerie Lewis, an associate professor of health policy and management at UNC’s Gillings School of Global Public Health, has said that such a scenario is possible.
“As a simple example, you could allow people who have cancer to buy into [an association health] plan, but the plan might cover zero cancer care — in effect removing coverage for the preexisting condition despite nominally allowing the person to purchase the insurance plan,” Lewis told the News & Observer.
