BEYOND THE NUMBERS
Texas Suit Is Only Latest Attempt to End or Weaken Protections for People With Pre-Existing Conditions
Responding to the Trump Administration’s decision not to defend the Affordable Care Act (ACA) against a suit from the attorneys general of Texas and 19 other states and to instead urge the court to invalidate the ACA’s core protections for people with pre-existing health conditions, several leading congressional Republicans affirmed their support for these protections. But their statements ignore the Administration and congressional Republicans’ multiple efforts last year to end or weaken key protections for people with pre-existing conditions in their ACA repeal bills.
“Everybody I know in the Senate, everybody is in favor of maintaining coverage for pre-existing conditions,” Senate Majority Leader Mitch McConnell stated after the Administration announced its decision. And the Administration itself sought to distinguish its legal stance from its policy views, with Health and Human Services Secretary Alex Azar asserting, “we share the view of working to ensure individuals with pre-existing conditions can have access to affordable health insurance.”
Republican legislation that the Senate considered last September, however — and for which the Administration continues to advocate — would have ended the ACA’s nationwide ban on charging sicker people higher premiums. Under that legislation, introduced by Senators Bill Cassidy, Lindsey Graham, Dean Heller, and Ron Johnson, states could freely waive this requirement. They could also waive other ACA consumer protections, such as the requirement that plans cover essential health benefits: services such as mental health treatment and prescription drugs that are often especially crucial for people with pre-existing conditions.
The Cassidy-Graham bill would have let states waive these protections for any insurance plan subsidized by the bill’s state coverage block grant. That means that a state that used even a small portion of its block grant funds to provide even tiny subsidies to all individual market plans could then waive the ACA rules for its entire individual market. And while insurers in these states would still be barred from denying coverage to people with pre-existing conditions, they could offer them plans with premiums of thousands or tens of thousands of dollars per month — a distinction without a difference for consumers.
Before the ACA, when decisions about pre-existing conditions protections were last left to states, 43 states plus Washington D.C. let insurers charge people more based on their health status; in the remaining states, benefit standards were generally weaker than they are under the ACA. Consistent with that history, the Congressional Budget Office (CBO) concluded that under Cassidy-Graham, “most states” would ultimately modify market rules and “coverage for people with preexisting conditions would be much more expensive in some of those states than under current law.”
Similarly, in an unusual joint statement, America’s Health Insurance Plans, the Blue Cross Blue Shield Association, the American Medical Association, the American Academy of Family Physicians, the American Hospital Association, and the Federation of American Hospitals wrote, “the bill will… undermine safeguards for those with pre-existing conditions. Without these guaranteed protections, people with significant medical conditions can be charged much higher premiums and some may not be able to buy coverage at all.” Independent experts and fact checkers also found that the Cassidy-Graham bill would undermine pre-existing conditions protections.
Support for Cassidy-Graham was strong enough that Senator McConnell initially considered bringing it to a vote, changing course only after three Republican Senators announced their opposition. Not only did the Administration support the proposal last year, but the President’s fiscal year 2019 budget, which he sent to Congress this February, urges “enactment of legislation modeled closely after the Graham-Cassidy-Heller-Johnson (GCHJ) bill as soon as possible.” And Cassidy-Graham reportedly serves as the template for a new repeal proposal that prominent conservatives are developing, with Administration support.
Other ACA repeal bills also eliminated or weakened various pre-existing conditions protections. The House-passed repeal bill included the so-called “MacArthur amendment,” which allowed state waivers similar to those under Cassidy-Graham. CBO found that under the House legislation, in some states, “less healthy individuals (including those with preexisting or newly acquired medical conditions) would be unable to purchase comprehensive coverage with premiums close to those under current law and might not be able to purchase coverage at all” [emphasis added].
Legislation that the Senate considered last summer didn’t let states waive the ACA’s prohibition on charging people with pre-existing conditions higher premiums, but did let them waive essential health benefit standards, which would have led to large increases in out-of-pocket costs for those needing these services, including people with pre-existing conditions. Later iterations of the Senate bill also incorporated the so-called “Cruz amendment,” which would have created a parallel individual market, operating alongside the ACA market, in which the ACA’s pre-existing conditions protections and other market reforms would no longer apply. The Administration is now seeking to achieve a similar result through administrative changes that expand the availability of various forms of coverage not subject to ACA rules.
The ACA’s protections for people with pre-existing conditions are at the core of its insurance market reforms, so it’s not surprising that ACA repeal proposals consistently seek to eliminate or weaken them. But policymakers cannot have it both ways: support for dismantling these protections in whole or in part is not compatible with support for “maintaining coverage for pre-existing conditions.”