Preexisting Conditions Protections at Stake

Preexisting Conditions Protections- More than an Election Catch Phrase

Finally in 2014, preexisting condition protections came into effect in the Affordable Care Act (ACA) by prohibiting the insurance market from denial of coverage or benefits based on a patient’s previous health history. This move has been a major issue within the current administration and a contested issue in the 2020 election.

The ACA is commonly referred to as Obamacare, even though Obama didn’t take an active role in drafting it. Most of the what is in it (and potential pitfalls) are the result of an intense process of political compromise that took up much of Obama’s first two years in office.

According to the Kaiser Family Foundation, it is estimated that at least 53.8 million adults under the age of 65 have a preexisting condition that would make them uninsurable. That is 27% of non-elderly adults who need reexisting condition protections.  Other studies have found those numbers to be much higher with roughly half of those numbers not enrolled in public assistance. The Department of Health and Human Services puts the number at 51%, around 133 million people.

Preexisting Condition Protections is Core to Obamacare

Prior to the ACA ruling, insurance companies could deny coverage to the part of the population. They could charge higher rates depending on the preexisting condition. This would be similar to charging higher auto insurance rates to those with a history of tickets or auto wrecks. Insurance companies are essentially gambling that they won’t have to pay. The gamble only pays off if what is paid in claims, is less than what is collected. But rather than insuring everyone and charging a fair premium for that, insurance companies historically only insured the healthiest, or those who were in group plans. Prior to Obama Care, insurance companies could write coverage which excluded at risk health conditions for an individual or even body parts from coverage. The ACA required that patients with preexisting conditions would receive the same access to health care and insurance with adequate and affordable premiums. In order to accommodate this new coverage, certain portions of public health care were increased via subsidies for the middle class, including Medicaid expansion for lower income individuals and families in order to extend coverage for health care under the new act.

This law also provided a cap for out of pocket expenses and banned annual and lifetime caps for treatment, as well as providing for basic health care for other policy owners such as annual check-ups, etc. A treatment cap is a provision that provides that when the lifetime cap is reached (say $1 million) then the insurance company doesn’t have to pay any more for that individual or family. Of course, any family that has reached its lifetime cap with one insurance company wouldn’t be able to get insurance coverage with any other insurance company.

This has traditionally only been an issue in the private insurance industry and never part of Medicaid or Medicare which are defined by their commitment to adults with preexisting conditions except when supplemental policies are in place which specific caps to annual or lifetime coverage. Both Medicare and Medicaid expanded in order to meet the needs of those specifically in need of long term care such as renal patients in need of dialysis or breast cancer patients who typically have longer terms of care.

Medicare is the federal medical insurance program for those over 65 who have worked. Medicaid is the federal income program for those people with insufficient resources, regardless of age.

By placing a ban on insurance companies in regards to preexisting conditions people with preexisting conditions were able to experience health care coverage which was not motivated by insurance companies competitively attracting only the healthiest in order to reduce their costs. In a highly suspect PR campaign, insurance companies brag about lowering rates without the ACA. But they are only lowering quoting insurance policies where based on them being able to take on only the healthiest in the population and offer them the cheapest rates. These rates are driven by competition between insurance companies for these low risk clientele which indeed leads to lower insurance rates, but only amongst the lowest risk Americans.

By providing government subsidies and incentives to insurance companies we are able to do what regulations have not done which is to even out the price of policies if at a higher rate than would be seen prior to the ACA ruling. In essence, only the healthiest are paying more than they might have, while those with any health concerns are paying a fairer rate.

This does not end with just health status. Insurance companies were also able to examine many other aspects of the lives of those they were considering for insurance. They could look at age, gender, occupation, and lifestyle in order to limit their clientele to only the lowest risk categories. This also allowed for insurance companies to sign on new customers with rates quoted at one level but with renewals which could bring rate increases and screening to make sure medical histories were indicative of low risk clients. For customers this put them at risk of denial of renewal due to health issues which would move them closer to or into the column of preexisting conditions. Acceptance for insurance would be a year to year commitment based on age, gender, health, occupation and lifestyle as well as other demographics. These demographics could expand into environmental and geographical concerns and something that was not even considered at the time: issues arising from Covid 19.

What we have seen in the past is that certain chronic health conditions, such as allergies or depression could also be considered as exclusions or reasons for denial in an industry vying for the healthiest among us. Any type of ongoing health condition would be a black-mark for acceptance or continuing coverage. This translates to a catch 22 in which, aside from basic medical care such as annual exams, almost any reason one might visit a doctor regularly would eventually disqualify you from coverage. This presents a dilemma to the consumer in which actually relying on your insurance coverage makes it more likely to lose coverage.

In the past this created huge uncertainty because conditions which arose while under insurance coverage could be examined and be denied coverage. They could ultimately deny coverage of common conditions such as maternity care or mental health issues. And refuse coverage of long term prescriptions.

Current Election Impacts Preexisting Condition Protections

The current election is a big decider in where we go from here. The Democrats propose expanding public coverage programs and perhaps going to a single payer program or other buy-in options to subsidize a standard of care for those with preexisting conditions.

Americans repeatedly have leaned in the direction of preserving protections for preexisting conditions and President Trump has falsely claimed to be for preserving these protections. But the GOP has introduced several proposals which would eliminate these protections for Americans and ultimately leave elderly Americans with higher insurance rates without the needed subsidies to cover an escalation of costs year to year.

It is wise to consider the ramifications of changes in the existing protections because they do not impact individuals in particular. For example, the concern is not limited to the breast cancer patient who is denied coverage and forced to seek a high risk policy as a result. The concern is that insurance companies will institute a general cap on what they will pay for anyone who might get breast cancer in the future amongst all their clients, literally guaranteeing that regardless of the fact that you believe you are insured for that possibility, you may be very disappointed to discover that a current insurance policy has no intention of paying if you become ill. This has been a practice in the past. It then becomes almost a case of one paying premiums for general health checkups in order to determine if you are healthy enough to be worth insuring and not to determine if you might have a health issue. That is not what we think of when paying an insurance bill.

Lifetime Caps another Trap

Lifetime caps for coverage are also a very emotional and heated topic. A child born with a heart defect requiring future surgeries might reach the cap for coverage before ever leaving the hospital. This forces otherwise self-sufficient and productive families to virtually change their financial status to qualify for assistance. The same holds true for cancer patients who often require years of followup and in particular those who may require ongoing maintenance chemotherapy or drug therapy even in the presence of high risk policies.

Accessibility to adequate care also brings up the question of what is adequate care? Is it access to only traditional and basic modes of treatment or does it include access to new and costly drugs or treatment? For example, this issue arose in several countries with the introduction of the drug, Herceptin, which is prescribed for HER2+ breast cancer patients to inhibit overactive cell receptors and prevent the spread of cancer cells. When it was introduced to the public, it was immediately touted as highly successful in raising survival rates. But with a global price tag of around $70,000 for a course of treatment, it set off lawsuits against insurers who declined coverage. This extended in the public health systems in countries like Canada who were basically forced to cover the costs of the drug. However, those countries with public health care were able to, in some cases, negotiate slightly lower costs as it was in the best interests to do so. The argument that public health care must provide accessibility is an undeniable legal argument which is a hard one to make when accessibility is not guaranteed in the private sector.

And while we examine the aspects of medical care itself there are other issues which are impacted by removal of protections for preexisting conditions. Employment is a huge concern when employers are providing health care coverage options. In order to participate in group options and employer might look at policies which limit certain types of coverage in order to reduce their costs. As a result they might reconsider hiring in the face of certain health conditions. For example when faced with a choice between an HIV positive individual or a healthy one they might choose against the HIV positive person. So far the language in proposed revisions do not provide enough specific explanation of how the limitations placed on individual coverage might impact all of those covered in a group plan. That limit place on an HIV positive individual might be construed to also apply to a cancer patient or other types of health issues.

We have also seen an entirely new scenario with Covid-19 in that 30 million Americans reported coverage gaps in their insurance due to job loss due to the initial stages of lockdown. Proposed alternatives to the existing system would not protect those temporarily losing coverage and would create obstacles to them finding alternative coverage when returning to work.

The GOP talks about preexisting condition protections but thinks  high-risk pools to subsidize those with preexisting conditions is the answer. But that is a situation we have never seen work effectively in this country as it has been chronically underfunded and inadequate.

At stake on this Election Day for almost half of Americans and their accessibility to adequate and affordable health care. We can see from the mildest examples such as allergies to life threatening conditions, the impact is indeterminable in its magnitude and ramifications. It affects so many aspects of American life from quality of life, to employment to individual and family pride in being part of a strong and productive workforce. This is a battle being fought in courts currently and continuously as the GOP attempts to dismantle what progress has been made in addressing the health concerns of those currently affected by preexisting conditions and those  who may be summarily shifted to that label in the future without recourse.

Why are we addressing the issue preexisting condition protections on a page about carbon monoxide poisoning? Because we are in the business of representing disabled people, primarily those with brain damage. It is hard enough to get care for the brain injured, but if preexisting conditions are another bar, the life disruption from brain damage will be that much worse.

This blog was written by Rebecca Martin