Legacies of the Affordable Care Act: Preexisting Conditions By Nicky Riordan
The Affordable Care Act (ACA) has undoubtedly impacted healthcare in America irrespective of what may become of the law moving forward. Never has this been clearer than over the past few months as Republicans tried and failed to repeal the ACA, even with majorities in both chambers of Congress.
This ongoing series will highlight the legacies of the ACA, beginning with the most obvious and then shifting to more subtle changes. This piece will focus on the bipartisan support that now exists for mandating coverage for people with preexisting conditions.
Prior to the passage of the ACA, each state had a different approach to coverage of preexisting conditions. Although insurance companies could not kick someone off a plan for falling ill, they could raise premiums, exclude a preexisting condition from coverage, or decline to offer insurance from the outset. Insurers contended these policies were necessary to remove incentives for individuals to sign up for insurance only once they were sick.
The Kaiser Family Foundation estimates that 27 percent of adults under 65 in the United States have “health conditions that would likely leave them uninsurable if they applied for individual market coverage” without the ACA. AARP estimated this would apply to 40 percent of adults between ages 50 and 64.
Preexisting conditions created hardship, even bankruptcy, for many people unfortunate enough to be in this position prior to the ACA. Since the law passed in 2010, overall bankruptcy filings in the United States have been cut in half. While this cannot be tied directly back to the ACA, due to reporting limitations, experts agree that “medical bills had been a leading cause of personal bankruptcy before...coverage expanded under the ACA”.
The Obama Administration understood that in order to address preexisting conditions, without creating a price bubble on all private plans, it would be necessary to offset the inclusion of high cost patients in the insurance market. This is where the individual mandate came in - pairing a popular provision regarding preexisting conditions with an unpopular provision. Both House and Senate GOP plans sought to eliminate the individual mandate, while struggling with how to effectively regulate the coverage of preexisting conditions.
The House’s American Healthcare Act (AHCA) required insurance companies to cover people with preexisting conditions, but created a waiver system that allowed insurers to opt out of covering ten “essential health benefits,” including maternity, prescription drugs, and mental health. The bill also allowed insurers to charge some people with preexisting conditions higher premiums, including charging older people up to three times more than younger people.
50 health conditions were considered “preexisting” (full list here). Waivers could be granted if “high risk pools” were established and they led to lower premiums and more widespread coverage. The Senate's proposed Better Care Reconciliation Act adopted a similar waiver system.
Many Republicans who voted against the bill “specifically cited the possibility that it could make it harder for people with serious medical conditions to buy insurance.” Some Republican governors, such as Scott Walker, abandoned the idea of opting out in the face of extensive opposition from their constituents. Other Republican governors opposed repealing the ACA from the outset.
These experiences suggest that Republicans and Democrats believe that any future changes to the health care system will need to include protections for people with preexisting conditions, illuminating a lasting legacy of the ACA. Should healthcare reform again become a policy priority for the GOP, a major focus will remain whether related law includes a waiver system with high risks pools, and if so, what the impact will be on access and premiums, particularly in states that opt out.
Nicky Riordan (@nriordan120), Political Analyst, Utica College Center of Public Affairs and Election Research
