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MacArthur Amendment Would Mean Return to Pre-ACA Law for People with Pre-Existing Conditions

Rep. Tom MacArthur has argued that his amendment to the House Republican bill to repeal the Affordable Care Act (ACA) will make “coverage of pre-existing conditions sacrosanct for all Americans.” In fact, it would do the exact opposite: end nationwide protections for people with pre-existing conditions and restore the pre-ACA status quo, when these protections existed only in states that chose to provide them.

Under the amendment, states would decide whether to stop plans from charging people with pre-existing conditions more and whether to require them to cover “essential health benefits,” such as maternity coverage, mental health and substance use treatment, and prescription drugs that people with pre-existing conditions need.

Here’s what it looked like when states last made those decisions, before the ACA:

  • 43 states and Washington D.C. let insurers charge higher premiums to people with pre-existing conditions; that is, they did not require full “community rating.” That means insurers could increase premiums by unlimited amounts for people with a history of cancer, hypertension, asthma, depression, or other conditions.
  • Even in the seven states that required community rating, benefit standards were generally much weaker than they are today. For example, not all of these states required coverage of maternity care, not all required comprehensive mental health coverage, and almost all allowed insurers to refuse to cover some of the costs associated with people’s pre-existing conditions
  • Overall, when states chose their own benefit standards, plans often failed to cover key services. Before the ACA, 62 percent of individual market consumers had plans that didn’t cover maternity care, 18 percent had plans that didn’t cover mental health treatment, 34 percent had plans that didn’t cover substance use treatment, and 9 percent had plans that didn’t even cover prescription drugs.

MacArthur wants you to believe that if you – or, more accurately, your governor and state legislature – like your insurance protections, you can keep them. But what the pre-ACA experience shows is that, faced with rising premiums, state policymakers would be under severe pressure to drop these protections.

Robust protections for people with pre-existing conditions weren’t sustainable for states without the rest of the ACA package: an individual mandate that people get health coverage or pay a penalty, and robust subsidies that keep individual market premiums affordable. Without them, states that tried to implement these protections found that premiums rose and markets were unstable due to adverse selection, with healthy people largely leaving the risk pool and leaving only those in poorer health enrolled. And under the House ACA repeal bill, those other ACA elements would be largely dismantled. Most immediately, the bill would eliminate the individual mandate, increasing premiums by 15 to 20 percent. Starting in 2020, it also would slash subsidies, increasing total out-of-pocket costs (premiums, deductibles, copays, and coinsurance) by thousands of dollars for millions of people.

As a result, states would face substantial pressure to seek waivers to eliminate the ACA’s pre-existing conditions protections and benefit requirements. Doing so would lower premiums for healthy people only at the expense of those with more serious health needs but, as the pre-ACA experience shows, it would likely strike many states as the only option to prevent their markets from falling apart.

And if states did seek waivers, getting them approved would be basically automatic. States would receive automatic approval for waivers within 60 days as long as they stated that the waiver would lower premiums, increase coverage levels, stabilize the market, stabilize premiums for people with pre-existing conditions, or increase the choice of health plans.

The end result would be a market that would likely look a lot like it did before the ACA: one in which people with pre-existing conditions lacked access to affordable plans that covered the benefits they needed, and in which even people with coverage were often one major illness away from medical bankruptcy. Notably, the MacArthur amendment would effectively let states waive even those protections it claims to preserve, including:

  • Bans on annual and lifetime limits on coverage. Because the ACA’s bans on annual and lifetime limits only apply to essential health benefits, waivers of essential health benefits would also let insurers go back to placing annual and lifetime limits on coverage – not just in the individual market, but also for people who get coverage through their employers. Before the ACA, 105 million people nationwide had lifetime limits on coverage, 28 million of them children and the vast majority of them with employer coverage.
  • Bans on charging women more than men. Eliminating essential health benefit requirements means that women would have to pay more for plans that included maternity coverage.

The American Medical Association; American Academy of Family Physicians, American Academy of Pediatrics, and other physician groups; the AARP; the American Cancer Society; and independent experts all agree: the MacArthur amendment guts pre-existing conditions protections. And the American public overwhelmingly believes that pre-existing conditions protections and essential health benefit requirements should apply nationwide, not just in states that choose to keep them.

That means House Republicans faced with a vote on the amended ACA repeal bill have a decision to make. They can go back on their promise that their health care legislation would “prohibit health insurance from denying coverage or charging more money to patients based on pre-existing conditions.” Or they can reject both the new amendment and the underlying bill that would lead 24 million people to lose coverage.