A White House push to let states waive mandatory coverage and rate requirements under the Affordable Care Act could jeopardize health insurance gains for millions of adults with pre-existing medical conditions who went largely without coverage before the health law passed.
This week, the White House tried to get Republicans in the House of Representatives to amend their Obamacare replacement bill with language that lets states opt out of two popular ACA provisions, including one that requires individual health plans to cover 10 so-called essential health benefits.
The other provision, known as “community rating,” bars insurers from varying premiums based on health status or medical history. It also requires them, under “guaranteed issue” rules, to offer coverage to all who want it.
Prior to the Affordable Care Act, individual insurers routinely denied coverage, hiked premiums or imposed coverage exclusions on the policies of people who had medical problems before they signed up for coverage.
Thirty-six percent of those who sought individual insurance faced those obstacles in 2009, according to a survey by The Commonwealth Fund, a private health research foundation. In 2010, nearly 1 in 5 who applied for individual coverage were denied because of their health status, according to Congress’ Government Accountability Office.
Serious conditions like heart disease, cancer, diabetes or depression could trigger coverage denials or drive up premiums. So could common ailments such as asthma, obesity, high blood pressure and high cholesterol.
Under community rating, the entire pool of plan enrollees pay the same premium rates. This spreads the higher medical costs of sicker plan members evenly among all who buy coverage. Rate variations under the ACA are allowed only for age, tobacco use and the cost of medical services.
Both guaranteed issue and community rating helped cut the number of uninsured people with pre-existing conditions by 3.6 million, or 22 percent, from 2010 to 2014, according to federal estimates.
But with 24 million set to lose coverage under the GOP health care bill that’s being considered, the ACA’s record coverage gains and many consumer protections are in peril.
If House Republicans allow states to waive the community rating rule, individual insurers will again be able to charge plan members different rates based on their health.
“We’re intrigued by the idea, but would certainly need a lot more more information before we can take any action either in support or in opposition” of the proposal, said Republican Rep. Mark Meadows of North Carolina, leader of the conservative House Freedom Caucus.
“We believe more freedom to the states would certainly be something that we would encourage,” Meadows said after meeting with other GOP House leaders and Vice President Mike Pence earlier this week.
Because rates for young and healthy people will likely decline under the proposal, Republicans expect their legislation to help stabilize local insurance markets by spurring more people to buy coverage. The insurance marketplaces have, thus far, been unable to attract enough young and healthy people, whose lower health costs help keep premiums low for all plan members.
Older people and sicker people, including those with pre-existing conditions, wouldn’t fare nearly as well under the plan. They’ll once again have to pay more for health insurance. That could leave many unable to afford it.
Some 52 million working-age adults have pre-existing medical conditions that would likely have left them unable to get health coverage before the Affordable Care Act, according to an analysis by the nonpartisan Kaiser Family Foundation.
In 11 states, at least 30 percent of non-elderly adults are estimated to have declinable medical conditions, the study found: West Virginia (36 percent), Mississippi (34 percent), Kentucky and Alabama (33 percent), Arkansas and Tennessee (32 percent), Oklahoma (31 percent) and 30 percent each for Louisiana, Missouri, Indiana and Kansas.
“Allowing states to eliminate the community rating requirement would also mean a return to invasive required questionnaires and paperwork that mandate medical exams tests, and other records to get coverage,” said a blog post Thursday by Sam Berger, senior policy adviser at the liberal Center for American Progress.
Meadows, of North Carolina,said this week that premiums would likely rise under the proposal to reflect an applicant’s added risk.
But those with more serious medical problems like cancer and AIDS, Meadows said, could get financial assistance with their premiums from a multibillion-dollar fund the GOP is also proposing.
On Thursday, at the urging of President Donald Trump, the House Rules Committee advanced an amendment to the stalled GOP health care legislation that would add a $15 billion risk-sharing pool to help plan members with high-cost medical conditions pay their premiums from 2018 to 2026.
The proposal adds to a 10-year $100 billion “market stability fund” the GOP is proposing to help states pay out-of-pocket costs like deductibles and co-pays for high-cost enrollees.
The $15 billion in additional funding would be “ a drop in the bucket” compared with “everything else (the GOP repeal legislation is) trying to take away,” said Harold Pollack, a professor at the University of Chicago School of Social Service Administration.
Each risk-pool enrollee requires an average of $7,000 to $10,000 a year in public funding, and $30 billion to $50 billion a year is needed to fully fund the pools nationally, Pollack said. The GOP bill, even with the extra $15 billion, doesn’t come close to providing that, Pollack said.
“Its just such a small step with so much left out,” Pollack said. “And it pales in comparison to the magnitude of the problem.”