What you need to know about preexisting conditions

The current debate: ACA v. ACHA

The Affordable Care Act barred insurance companies from up-charging or refusing to cover those with preexisting conditions.  The restriction, effective since January 2014, was a sharp break from former insurance company practices, when ill applicants were routinely denied or priced out of coverage. Preexisting conditions are, in short, health conditions which exist before the insured’s coverage begins.

As Republicans work to make good on their campaign promises to repeal the ACA, coverage for those with preexisting conditions hangs in the balance. If the GOP can successfully repeal the insurance protections extended by the ACA to those with preexisting conditions, about 130 million Americans may see their healthcare costs rise.

The GOP plan approved by the House would let individual states decide whether to allow insurers to charge those with preexisting conditions higher rates for individual marketplace plans.  This provision – housed in the McArthur Amendment (from Rep. Tom McArthur, R-N.J.) – would allow states to request waivers from various essential health benefits (EHB) requirements. While insurers would not be permitted to deny applicants coverage entirely, they would (with the state’s approval) increase premiums such that those with preexisting conditions might be effectively priced out of obtaining coverage. The benefit of this scheme is that the overall price of individual marketplace plans will be driven down, as sick people are priced out of the system. Those who receive insurance through their employer would remain unaffected.

The Senate is now mulling the House’s version of the healthcare legislation behind closed doors, promising details of its plan later this week.  However, the outline of the Senate plan reveals that the Senate is disinclined to allow insurers to charge higher rates to those with preexisting conditions. While it would require insurers to charge sick and healthy applicants the same premiums, it does contain the House provision allowing states to waive coverage for EHBs.

EHB waivers in action

If states could receive waivers for certain EHBs and pass those along to the state’s insurers, the cost (and quality) of health plans would fall dramatically. States would be able to obtain waivers coverage for services like dental and vision care for children, maternity care, substance use disorder treatment, mental health care, or prescription drugs.

They could also obtain waivers on the ACA’s ban on lifetime and annual limits on coverage, which would increase payments by thousands of dollars – a burden that would fall disproportionately hard on cancer patients. A report from the Center for American Progress noted that under the GOP plan, insurers would be permitted to charge people with cancer as much as $142,650 more for their coverage, which is a 3,500% increase.

List of preexisting conditions

Insurers typically set their own lists of preexisting conditions which either barred applicants from coverage or significantly drove up the cost of their coverage. Based upon those pre-ACA health benefits, the following are examples of preexisting conditions that might create rate increases for applicants in the individual market.

 
 

According to the Kaiser Family Foundation, other conditions like allergies, anxiety, depression, ear infections, fractures, high cholesterol, hypertension, incontinence, menstrual irregularities, restless leg syndrome, tonsillitis, urinary tract infections, varicose veins, and vertigo may make it more difficult to purchase a health insurance plan. And while some pre-ACA plans considered rape and domestic violence to be preexisting conditions, some states have since prohibited that practice.  As CNN reported:

Before Obamacare, some insurance companies used to consider medical treatment related to domestic violence and rape a pre-existing condition that would preclude survivors from getting insurance. Some states have banned that practice, but not all.

The ACA barred insurance companies from using an applicant’s history of domestic violence to deny them coverage, but a repeal of the ACA could put those applicants at risk again in the insurance marketplace. Pre-ACA, they often encountered challenges in obtaining insurance:

In 1994, the House Judiciary Committee did an informal survey of 16 of the nation’s largest insurers, representing about 50% of the market at the time. Eight of the 16 companies admitted using domestic violence as a factor to set premiums and to determine who should get a policy.

The same was true for rape survivors.

[A] health insurance agent … asked insurance underwriters she worked with whether rape survivors would get coverage. She said the underwriters told her no. Medical treatment associated with rape made the person too high a risk.
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The Affordable Care Act changed that. And it ensured that tests for HIV and sexually transmitted diseases, plus domestic and interpersonal violence screening and counseling, would be completely covered by insurance companies.

Changes would hurt patients, providers

Rollbacks in the protections and benefits offered to those with preexisting conditions could have disastrous effects for those applicants' health. If they are priced out of the insurance market, then they lose access to affordable and needed healthcare services. This also has a major impact upon providers whose exclusive focus is the treatment of one of the pricier preexisting conditions.

Curious about how this might impact your practice? Looking for ways to create a fair and legally-compliant financial aid policy for your practice? Questions about your legal and ethical obligation to continue a patient's care even if that patient loses his/her ability to pay? Reach out -- we'd love to help.

Read more:

U.S Department of Health & Human Services, Pre-Existing Conditions (last reviewed Jan. 31, 2017).        

Emily Gee, Number of Americans with Pre-Existing Conditions by Congressional District, Center for American Progress (April 5, 2017).

Alicia Adamczyk, 50 Health Issues That Count as a Pre-existing Condition, Time (May 4, 2017).

Topher Spiro, How the Senate health-care bill will drop people with preexisting conditions, The Washington Post (June 14, 2017).

Lydia Ramsey, From acne to pregnancy, here’s every ‘preexisting condition’ that could get you denied insurance under Trump’s new healthcare bill, Business Insider (May 5, 2017).

Jen Christensen, Rape and domestic violence could be pre-existing conditions, CNN (May 4, 2017).

© 2017 Jackson LLP

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