What’s the Deal With “Pre-Existing Conditions”?

Hello all,aca

Welcome to another edition of “What’s the Deal?” the blog that has a very, very big HSA.

In this week’s post, we’ll discuss the possibility of Congressional and Presidential “Plans” to repeal and replace the Patient Protection and Affordable Care Act (PPACA, ACA, or more commonly called “Obamacare”) and discuss the possible outcomes of such actions.

Included in this edition are talks on what is at stake to be lost by the public including a return to previous health insurance practices that restricted access for millions of Americans based on a “pre-existing condition.”

See, I told you I read it

See, I told you I read it

Previous posts at “WTD” have looked at many parts of the ACA, aka “Obamacare,” here, here, here, and here.  But now with a new administration that campaigned on eliminating health care reform, a post should be made that discusses what stands to be lost (or what needs to be replaced) if the ACA is actually repealed.

What Works and What is Popular (not necessarily the same)

Since its passage in 2010 and its initial implementation in 2014 the ACA has had three major impacts on health care that most people generally accept as positive:

  • increasing available coverage to the general public (mainly through expansion of Medicaid)
  • Allowing young adults to stay on parents’ plans until they are 26 – especially helpful during the recession*
  • Eliminating discriminatory insurance practices such as excluding coverage or biasing coverage based on pre-existing conditions (like having certain illnesses, or simply being a woman).

    It says here that since you're a woman, it is going to cost twice as much

    It says here that since you’re a woman, it is going to cost twice as much

These impacts have led to the expansion of health care coverage for more than 20 million Americans since 2014 and more importantly have opened the door to specific groups to have vital health care including the sick, impoverished, and more women overall.

Some of the more unpopular parts of the law that are attacked most frequently have to do with what allows the law to function:

  • the individual mandate (the requirement of having health insurance or to pay a penalty)
  • The requirement that all employers and insurance plans to allow access to birth control and abortion services (very controversial)
  • The state based Health Insurance Exchanges (marketplaces) that allow individuals to purchase insurance aren’t available everywhere and require many working pieces. (if state governments chose not to set up an exchange, the Feds set up one for them anyways)
*Including me!

Repeal and Replace?

President Trump and Republican allies in Congress have talked and made extensive efforts to repeal the Affordable Care Act and have more recently proposed certain ideas for replacing the health care law. Prior legislative and judicial efforts at repeal during the Obama administration strictly focused on repealing the law and not on replacing the law with any alternative. During the election and under the new administration, the constituents of lawmakers (both Republican and Democratic) have been vocal in their support of the above mentioned elements of the law and so lawmakers have spoken of and have written outlines of plans.

Newly appointed HHS secretary Tom Price, readily awaiting his turn to dismantle his cabinet department

Newly appointed HHS secretary Tom Price, readily awaiting his turn to dismantle his cabinet department

Four major plans to replace the ACA have been proposed since the beginning of 2015 including from House Speaker Paul Ryan, newly appointed HHS secretary and Senator Tom Price, Senator Bill Cassidy, and Senator Rand Paul. Here are the highlights (though not all) from each:

  • Paul Ryan: “A Better Way”
    • Eliminate the individual mandate, repeal private market rules and standards for benefits, keep some rules such as eliminating preexisting conditions and allowing patients to stay on parents plan until age 26, convert Medicaid expansion funding to a block grant.
  • Tom Price: “Empowering Patients First”
    • Eliminate the law entirely, no individual mandate, preexisting conditions can apply, insurers must allow continuing coverage (“grandfathering in”), state high risk pools for low income and the sick to purchase insurance in.
  • Rand Paul: “Obamacare Replacement Act
    • Repeal most major ACA market rules such as coverage standards and preexisting exclusion periods, but retain dependent coverage til 26 and retain medicaid expansion.
  • Bill Cassidy: “Patient Freedom Act
    • States have the option of keeping the rules of the ACA, medicaid expansion is not repealed. Some private market rules kept overall including dependent age 26, prohibitions on discrimination based on sex, race, age, or disability. (most rules of ACA are retained if states choose)

Close analysis of the repeal plans show that the promise of keeping the popular parts of the law (dependent age 26, elimination of preexisting conditions, etc..) will not be easy or possible to keep.

Prior to the ACA – A Chilling Reminder

pre-ACA was as H-A-F

pre-ACA was as H-A-F

Before the healthcare law was passed in 2010, the landscape of insurance markets, affordable access to basic care, and the probability of an individual having health insurance was very different. Having access to health care be priced in a market economy instead of universally guaranteed is one of the starkest contrasts between America and most industrialized countries. The culture of belief in universal health care (or lack there of) was certainly most evident prior to the ACA.

Because covering the cost of expensive medicines, surgical procedures, and testing for sick people is expensive, individuals with long term illnesses, severe disabilities, and other preexisting conditions were charged much more for health care than healthy people. Often folks in poorer health are also poor – so health insurance was often unaffordable even when group plans through employers are available – though having insurance through an employer is a much rarer commodity than it used to be especially for low-income folks who may work multiple jobs. Having to pay for a procedure, medication, or just a PCP annual check-up could be an enormous expense for someone without insurance often leading to endless rounds of monthly payments, cash advances, collection agencies and debt collections. A person without insurance could have had to choose whether to see the doctor and risk financial ruin, or to save money.

These issues, as described above, felt by low income folks, but also included women – who as was described earlier – were charged more for insurance simply because of their gender – known as the gender rating. Insurance rates were higher because women generally use health care more when they are younger compared to men. This is a preventative behavior measure. Men use health care more when they are older and have accumulated more health issues – leading to higher cost health care procedures, and arguably, a shorter life span. Women also have unique health needs such as trips to OB/GYN doctors, fertility clinics, family planning medicine, and pregnancy. In addition to rejecting insurance applicants for being a survivor of domestic violence, charging women more for the same care (even when the man was as smoker), insurance plans intentionally excluded health  needs such as  maternity care from their plans.

Hard to put yourself in their shoes, when it's the Pharma Bro

Advocate for the Devil: Hard to put yourself in their shoes, when it’s the Pharma Bro

From the insurance business industry’s perspective (I’m playing devil’s advocate in case you couldn’t tell) it made perfect business sense to discriminate against people with preexisting conditions – it was not profitable to provide insurance to sick people. In the end though, it was all consumers who ended up footing the bill.

Though the insurance market may not be universally guaranteed, emergency rooms at public hospitals must provide care to people in need even when they do not have insurance. When folks used that care (such as a sick child, mother, or homeless person) it was the county who footed the bill resulting in higher local taxes for everyone. This is one of the reasons why the ACA insisted on an individual mandate (like the one built for the Massachusetts state health care law) – if everyone pays into the pot, including healthy people, then you have a financial pool from which to help cover sicker folks.

According to a Kaiser Family Foundation review, 27% of adult Americans under age 65* or approximately 52 million people have a preexisting condition that under pre-ACA rules would likely leave them uninsurable.

*a conservative estimate

The PPACA – A Flawed Model that is Working (for the moment)

The PPACA is not a model law by any means – there are several flaws with the legislation since its inception in 2010 and rollout in 2014 – not to mention the many stumbles by the Obama administration during its roll out (such as the ill prepared healthcare.gov or lack of marketing) – including the very high rise in cost for health plans that have priced some people out of the market. This is a serious issue and should be considered in editing the original legislation as it pertains to providing health care in the long run.

A rising issue

A rising issue

It should be noted, however, that the extreme opposition to the law from many states and Congress have severely impeded the law’s successful implementation and have been part of the issue that has led to higher costs for all. The refusal of many states to set up market exchanges forced the Federal government to cover them – the continuous barrage of “repeal” acts that were never going to be passed hurt the viability of a successful market and repelled some insurers from participating – and the intense legal battles that made it to the supreme court also hurt the laws successful chances and led to the issues with the law we see today.

The protections and changes to the industry that have protected consumers and allowed many people to access health care for the first time are too big of steps to ignore or to eliminate – evidenced by the adversarial town hall meetings that lawmakers have faced in their districts. Unfortunately for the Republican side, in order to keep a lot of the health care laws popular items, the unpopular items (read: the mandate) seem to be quite necessary to fund the process.

Creating a Repeal and Replacement Plan is a dangerous business, especially when there is no plan

Sources and Further Reads:

http://kff.org/interactive/proposals-to-replace-the-affordable-care-act/

http://kff.org/womens-health-policy/fact-sheet/womens-health-insurance-coverage-fact-sheet/

http://nwlc.org/wp-content/uploads/2015/08/stillnowheretoturn.pdf

http://news.ehealthinsurance.com/news/average-individual-health-insurance-premiums-increased-99-since-2013-the-year-before-obamacare-family-premiums-increased-140-according-to-ehealth-com-shopping-data

http://kff.org/health-reform/issue-brief/pre-existing-conditions-and-medical-underwriting-in-the-individual-insurance-market-prior-to-the-aca/

https://resources.ehealthinsurance.com/wp-content/uploads/Bringing-Affordability-to-the-Affordable-Care-Act-A-Proposal-from-Gary-Lauer.pdf

http://kff.org/report-section/ehbs-2015-summary-of-findings/

 

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About eprileson

I am a historian and writer who wants to bring to light current events through a historical perspective. It is difficult to understand today's current events without having a grasp of what has occurred before. This is a running thread to help keep people informed about the present and remind everyone to not forget their past. Enjoy and please comment!
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