Senior Policy Analyst
Congressional Republican leaders who plan to repeal the Affordable Care Act (ACA) as early as next month also say they want to ensure that people with pre-existing health conditions can continue to get health coverage. But it’s hard to see how that’s possible.
The reconciliation bill that President Obama vetoed earlier this year — which is the likely Republican approach for repeal in 2017 — would have immediately eliminated the requirement that most people have coverage or pay a penalty. It also would have scrapped after two years the premium credits and cost-sharing reductions that help make marketplace coverage affordable for low- and moderate-income people.
Both elements are critical for insurers to meet the ACA requirements that they offer coverage to people with pre-existing health conditions and not charge them higher premiums. Without the penalty and the subsidies, the individual market would destabilize and ultimately fail, as the Urban Institute’s new analysis of the approach in the vetoed reconciliation bill shows. Under that bill, which left the pre-existing condition protections and the other ACA “market reforms” in place, an estimated 4.3 million people would drop their marketplace coverage right away because they wouldn’t face a penalty for being uninsured. Healthier people would be the most likely to go without health insurance, delivering a financial hit to insurers that would lead many to stop offering marketplace plans or sharply raise premiums.
To keep healthier people’s premiums relatively low and encourage them to enroll, while eliminating the penalty for not having coverage and subsidies that defray people’s costs, the protections for people with health conditions would need to be far weaker than they are today. For example, even if insurers still couldn’t deny coverage to people with pre-existing conditions, they’d likely be able to use other tools to shift costs onto sicker people, such as once again charging higher premiums based on a person’s health status, excluding coverage of specific conditions, or refusing to cover key services and medications that people with high-cost conditions use.
Some congressional Republicans have proposed a “continuous coverage” limitation, under which people with pre-existing conditions would be protected from health insurer denials and higher premiums based on their health status only if they’d previously maintained coverage for at least 18 months or up to three years, depending on the proposal. But that would leave out many people because short breaks in coverage are common. Before the ACA, 36 percent of Americans aged 4 to 64 — 89 million people — went without coverage for at least one month between 2004 and 2007, and about one-quarter of that group lost coverage more than once, one study found.
President-elect Trump supports re-establishing high-risk pools, and policymakers could propose this as the only way for people with pre-existing conditions to access coverage. But states tried high-risk pools before the ACA, and they didn’t provide affordable, adequate coverage to people with costly health conditions.
Rolling back the ACA’s protections for people with pre-existing conditions would hurt millions of Americans. At least 27 percent of adults under age 65 have health conditions that would render them “uninsurable” under pre-ACA insurer practices that existed in nearly all states’ individual markets. And pre-ACA, even less severe problems like chronic sinus infections or seasonal allergies could cause insurers to charge individuals much higher premiums or take other steps to avoid bearing people’s health care costs.
Protections for people with health conditions are among the ACA’s most popular features, but repealing much of the law would ultimately result in eliminating or drastically eroding those protections.