Protecting People With Pre-Existing Conditions Isn’t As Easy As It Seems

With the death of Justice Ruth Bader Ginsburg, a lawsuit before the Supreme Court to overturn the Affordable Care Act (ACA) suddenly has a much better chance of succeeding. And, that could make protections for people with pre-existing conditions an even bigger campaign issue.

The Trump administration, which would normally be in court defending a federal law, is instead supporting the lawsuit, which was brought by Republican state attorneys general and several individuals.

COVID-19 would likely become a pre-existing condition without protections written into law. In fact before the ACA, having taken hydroxychloroquine in the previous year — a marker for malaria, lupus, or rheumatoid arthritis — could get you excluded from coverage.

President Trump has vowed to protect people with pre-existing conditions if the ACA is overturned and recently issued an executive order saying it is the “policy of the United States” to “ensure that Americans with pre-existing conditions can obtain the insurance of their choice at affordable rates.” However, the president’s order carries no force of law, and he has never released a plan to replace the ACA or protect people with pre-existing conditions. President Trump’s record includes support for legislation to repeal and replace the ACA that would have weakened pre-existing condition protections, and expansion of short-term insurance plans that are not required to cover pre-existing conditions.

Former Vice President Biden supports the ACA and its protections for people with pre-existing conditions, and has a proposal to build on the ACA with increased premium subsidies to make coverage more affordable, as well as a public option health plan available to anyone.

Providing comprehensive protections to people with pre-existing conditions, as the ACA does, requires outlawing a variety of insurance practices that were common before the law took full effect in 2014, including:

• Denying insurance to people with pre-existing conditions or in certain occupations.
• Excluding coverage of any care associated with a pre-existing conditions.
• Charging higher premiums to people based on their health or gender.
• Limiting benefits associated with certain pre-existing conditions, like mental health, substance use treatment, maternity care, and prescription drugs.
• Imposing lifetime or annual caps on benefits.

All of these practices were the norm in the individual insurance market before the ACA. Even in employer-provided health plans, which guaranteed access to coverage for people with pre-existing conditions, lifetime and annual limits were common, and coverage for pre-existing conditions could be excluded for up to one year for new enrollees who did not have prior continuous health coverage.

Fifty-four million non-elderly adults had a pre-existing condition before the pandemic that would have led to a denial of health insurance in the individual market before the ACA, and more than 100 million had a condition that would have likely led to higher premiums or coverage limitations.

Beyond the insurance regulations required to protect people with pre-existing conditions, a big challenge is preventing a premium “death spiral.” If people are guaranteed access to insurance when they are sick, there is a risk that people will tend to avoid buying coverage when they are healthy and just wait to see if they get sick. That would lead to an insurance pool with disproportionately sick people, and therefore much higher premiums.

The ACA included both a carrot and a stick to encourage currently healthy people to buy insurance. The stick was the individual mandate penalty, which has since been repealed. The carrot is the current subsidy provided to low and middle income people. Providing comprehensive pre-existing condition protections without some similar mechanism to create a balanced insurance pool would cause premiums to increase substantially and result in an unstable market.

While the ACA has provided comprehensive protections for people with pre-existing conditions, it is not the only way to provide those protections. A universal health coverage system like Medicare for all, financed through taxes, could also guarantee affordable health care for people with pre-existing conditions. A high-risk pool available to people who are turned down by private insurers could provide protection as well, if it were adequately financed and had comprehensive coverage at affordable premiums.

All of these approaches, including the ACA, have trade-offs and require significant government regulation and financing. While it seems that every candidate — including President Trump — is vowing these days to protect people with pre-existing conditions, you can’t just click your heels together three times and make it come true.