If You are Sick, How Can you BUY Health Insurance? No More Pre-existing Cond.Law
Many people are worried about how potential changes to the federal health law might affect them. But few are as concerned as those with pre-existing health conditions.
The Affordable Care Act (ACA) made it illegal for insurers to deny or charge people more money because of a history of illness. That's a pretty big deal because an estimated 52 million American adults have such conditions – ranging from serious ailments like diabetes and HIV to more minor maladies like acne or seasonal allergies. Before the ACA, people with these conditions were often denied insurance. If they were offered insurance, it could cost more or didn’t include coverage of their condition.
Republicans insist they want to continue to allow people with pre-existing conditions to maintain their coverage in any replacement for the health law.
“We are protecting those patients living with pre-existing conditions," said House Energy and Commerce Committee Chairman Greg Walden, R-Ore., at the start of his committee's consideration of the GOP health bill last Wednesday.
But it is not yet clear how Republicans will be able to do that without also making everyone buy insurance, which leads to our listener question this week.
Rich Renner of Collingswood, N.J., asks, if the law is repealed “and whatever replaces it does not include a pre-existing conditions provision, are there any programs in place at the state level that would step in to help?"
In a word, no. But it's complicated.
First, a little background. People who get their insurance on the jobs have been protected against discrimination for pre-existing conditions since 1996, when Congress passed the Health Insurance Portability and Accountability Act (HIPAA). People can go from one job-based policy to another job-based policy, or, in some cases, to an individual policy, as long as they remain covered without a break of more than 63 days.
But insurance companies who offer policies to individuals who don't get it through their jobs were afraid that if sick people could buy insurance, it would drive costs up, and healthy people wouldn't bother to buy coverage or would be priced out. That could lead to an insurance "death spiral" — a loaded term both sides of the aisle have thrown at each other's health reform plans frequently over the years but one that has truly bad consequences. It’s where there are no healthy people left to help spread out the costs of the sick.
The compromise in the ACA to ensure that sick people would have insurance was to require healthy people to buy insurance, too, or else pay a fine. That wasn’t popular, and it's the number one item Republicans say they want to repeal.
In the bill introduced by Republican leaders, however, the requirement for insurers to sell to those with pre-existing conditions remains intact. That’s not because they don't want to repeal it, but because they can't do it under the budget rules that govern the current bill.
But that doesn't guarantee people with pre-existing conditions will still be able to get insurance.
That's because the bill would eliminate the penalty for people who fail to have health coverage. That's what was supposed to get healthy people to sign up to help offset the cost of those with pre-existing conditions.
Instead, under the GOP proposal, people those who don't remain covered without a break of more than 63 days would have to pay 30 percent higher premiums for a year. Analysts say that could actually deter healthy people from signing up until they need care.
And if that happens and there are still too many sick people signing up, more insurers will stop selling coverage until there's nothing left to buy.
So in the end you could have a guarantee of health insurance, but no way to buy coverage. Obviously there’s much more to be worked out here.
Got more questions about what's happening to the ACA? I'll be back next week with even more answers. Just tweet @MorningEdition using the hashtag #ACAchat.
Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation.
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