Recent legal and policy developments related to the repeal of the Affordable Care Act (ACA) has made future protections for people with pre-existing medical conditions a focus of debate across the U.S. again. According to the Centers for Disease Control and Prevention, 27 percent of adults aged 18-64 in the U.S. have a pre-existing condition that would have caused them to be denied of insurance before the ACA. A larger share of non-elderly women than non-elderly men have declinable existing conditions.
The Affordable Care Act contained a number of new rules related to pre-existing conditions. Perhaps the most significant of these provided guaranteed access to insurance in the individual market regardless of condition of health. This means that individual and small group plans are now issued to all applicants, regardless of medical history. Secondly, insurers can no longer charge varying premiums based on an individual’s health, with no pricing variations based on health status. And thirdly, insurers must cover essential benefits, such as coverage for maternity, mental health and substance abuse.
Coverage for pre-existing conditions is popular because it protects the millions of people who fall in that category. Pre-existing conditions are very common. While the term “pre-existing condition” has never been clearly defined, it certainly applies to serious conditions like cancer, heart disease and asthma. But it has also been applied to conditions like pregnancy, acne or a distant history of depression. Pre-existing condition protections are also popular to people who aren’t yet in that category because they know they are at risk for a medical condition at any time.
But the cost of covering pre-existing conditions are also part of why the cost of individual market coverage continues to rise. Subsidies often offset these costs for the vast majority of people through the exchanges, but for those who don’t get subsidies, (which includes everyone outside of the exchanges), the premiums can certainly be costly.
For this reason, the ACA pre-existing condition rule remains controversial. In the event that future legislation rolls back certain aspects of the ACA’s protections for people with pre-existing conditions, it’s important to understand how this would work.
There are four main health insurance groups in America:
If the ACA’s pre-existing condition protections were to be repealed, the new law would be applied uniformly across all of these health insurance groups. The primary changes that the ACA brought were in the individual market, which impacts about 16 percent of those insured. But even if the ACA’s protections were to be eliminated, there are still other protections that pre-date the ACA and would continue to protect many Americans.
HIPAA (Health Insurance Portability and Accountability Act) is one such protection. HIPAA dates back to the mid-90s and has provided important protections for people who obtain employer-based coverage. Under HIPAA, as long as an employee has maintained continuous coverage for at least 12 months with no more than a 63-day lapse, pre-existing conditions must be covered.
Medicare and Medicaid will still continue to cover pre-existing conditions. The ACA did not change anything about pre-existing coverage under Medicare and Medicaid. However, it did expand access to Medicaid.
If the ACA pre-existing condition rules are repealed, they would most dramatically affect the individual market pool of self-insured individuals. Some of the ACA repeal/replace pieces of legislation that were introduced – and not passed – in 2017 called for retaining the ACA’s pre-existing condition protections. In all likelihood, these protections will remain in effect in future legislation. However, there are two main avenues for covering pre-existing conditions that are commonly included in most healthcare reform proposals: high-risk pools or a “continuous coverage” requirement, or both.
High-risk pools were commonly used by people with pre-existing conditions in the 90s and 00s. High-risk pools were very expensive, had very high deductibles and limited lifetime benefits. In addition, some high-risk pools had to limit enrollment due to budget constraints. Most experts agree that funding for high-risk pools have not been adequately funded in past proposals.
Continuous coverage is an attempt to extend some of the HIPAA protections to the individual market. Basically, people who maintain continuous coverage would be eligible to enroll in a new plan at the standard premium, regardless of pre-existing conditions. However, people with a gap in coverage would be subject to penalties. Substantially higher premiums would be applied to people with pre-existing conditions seeking to enter or re-enter the individual market after a pre-determined period.
Currently, with Democrats in control of the House, there is virtually no chance that legislation repealing pre-existing conditions would pass. However, if the ACA’s provisions are eliminated, people who seek coverage in the individual market could potentially face denial for coverage if they have a pre-existing condition. Also, even in the large group market, people with ongoing medical needs who have employer-sponsored plans could be impacted as well.
The future of healthcare reform is an ongoing debate in American and concerns about pre-existing conditions are absolutely valid. However, for the time being, nothing has changed about coverage for pre-existing conditions, and nothing is likely to change in the near future.