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How Will People Who Are Already Sick Be Treated Under A New Health Law?

Mar 13, 2017
Originally published on March 13, 2017 8:49 am

Many people are worried about how potential changes to the federal health law might affect them. But few are as concerned as those with pre-existing health conditions.

The Affordable Care Act (ACA) made it illegal for insurers to deny or charge people more money because of a history of illness. That's a pretty big deal because an estimated 52 million American adults have such conditions – ranging from serious ailments like diabetes and HIV to more minor maladies like acne or seasonal allergies. Before the ACA, people with these conditions were often denied insurance. If they were offered insurance, it could cost more or didn't include coverage of their condition.

Republicans insist they want to continue to allow people with pre-existing conditions to maintain their coverage in any replacement for the health law.

"We are protecting those patients living with pre-existing conditions," said House Energy and Commerce Committee Chairman Greg Walden, R-Ore., at the start of his committee's consideration of the GOP health bill last Wednesday.

But it is not yet clear how Republicans will be able to do that without also making everyone buy insurance, which leads to our listener question this week.

Rich Renner of Collingswood, N.J., asks, if the law is repealed "and whatever replaces it does not include a pre-existing conditions provision, are there any programs in place at the state level that would step in to help?"

In a word, no. But it's complicated.

First, a little background. People who get their insurance on the jobs have been protected against discrimination for pre-existing conditions since 1996, when Congress passed the Health Insurance Portability and Accountability Act (HIPAA). People can go from one job-based policy to another job-based policy, or, in some cases, to an individual policy, as long as they remain covered without a break of more than 63 days.

But insurance companies who offer policies to individuals who don't get it through their jobs were afraid that if sick people could buy insurance, it would drive costs up, and healthy people wouldn't bother to buy coverage or would be priced out. That could lead to an insurance "death spiral" — a loaded term both sides of the aisle have thrown at each other's health reform plans frequently over the years but one that has truly bad consequences. It's where there are no healthy people left to help spread out the costs of the sick.

The compromise in the ACA to ensure that sick people would have insurance was to require healthy people to buy insurance, too, or else pay a fine. That wasn't popular, and it's the number one item Republicans say they want to repeal.

In the bill introduced by Republican leaders, however, the requirement for insurers to sell to those with pre-existing conditions remains intact. That's not because they don't want to repeal it, but because they can't do it under the budget rules that govern the current bill.

But that doesn't guarantee people with pre-existing conditions will still be able to get insurance.

That's because the bill would eliminate the penalty for people who fail to have health coverage. That's what was supposed to get healthy people to sign up to help offset the cost of those with pre-existing conditions.

Instead, under the GOP proposal, people those who don't remain covered without a break of more than 63 days would have to pay 30 percent higher premiums for a year. Analysts say that could actually deter healthy people from signing up until they need care.

And if that happens and there are still too many sick people signing up, more insurers will stop selling coverage until there's nothing left to buy.

So in the end you could have a guarantee of health insurance, but no way to buy coverage. Obviously there's much more to be worked out here.

Got more questions about what's happening to the ACA? I'll be back next week with even more answers. Just tweet @MorningEdition using the hashtag #ACAchat.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation.

Copyright 2017 Kaiser Health News. To see more, visit Kaiser Health News.

STEVE INSKEEP, HOST:

Let's ask Julie Rovner about the federal health law. Proposed changes to that law will be even more up for the public debate this week, as we learn just how much a Republican plan to replace Obamacare may cost. Julie's a longtime NPR correspondent, now with Kaiser Health News, who's covered health care roughly forever. So she's the perfect person to ask. Hi, Julie.

JULIE ROVNER: Hey, Steve.

INSKEEP: And we take this one question at a time. This week's question comes from Rich Renner of Collingswood, N.J. Here's his question.

RICH RENNER: If the ACA is repealed and whatever replaces it does not include a pre-existing conditions provision, are there any programs in place at the state level that would step in to help?

INSKEEP: Julie.

ROVNER: Well, not right now. This is something that actually was overtaken by the federal Affordable Care Act. So there's nothing at the moment.

INSKEEP: Isn't it a promise of the Republicans now, who say they want to replace the ACA, that they would keep the pre-existing conditions rule?

ROVNER: Yes, it is. And they've been saying that all along. But it's not going to be easy for them to do. First of all, a lot of people have pre-existing conditions, about 1 in 4 adults. And prior to the ACA, people could be excluded from individual insurance for things as minor as hay fever or having been treated for a bad back. So it's not just the serious diseases.

Now, this hasn't been a problem in the group market for 20 years. That was taken care of. But in the individual market, it was harder because insurers didn't want to sell to all the sick people. They were afraid that prices would go up, and healthy people wouldn't want to join.

INSKEEP: OK, President Trump says he wants to keep this very popular provision of the Affordable Care Act. Republicans in Congress say they want to keep it. Why do you say it's going to be hard?

ROVNER: Well, at the moment, they actually haven't touched it in the bill that they're proposing. And that's not because they didn't want to but because they can't. The budget rules they're operating under to let them avoid a filibuster in the Senate mean that they...

INSKEEP: Oh, they can't change the entire law anyway, OK.

ROVNER: That's right. This is one of the things they can't change. But they did change a different piece of it. There are eliminating the penalties for people who don't buy insurance. And those were, of course, to get more healthy people to buy insurance so insurers wouldn't go broke covering the sick people. So what could happen now is if people don't have to join, only the sick people will sign up. And the insurers might not be there to offer coverage.

INSKEEP: Wait a minute. So the mandate to buy health insurance, which Republicans want to get rid of, is connected to this guarantee for people with pre-existing conditions?

ROVNER: That is exactly correct. That mandate was to help ensure that enough healthy people bought insurance to help offset the costs of the sick people that insurers are now required to cover because of the ban on pre-existing condition exclusions.

INSKEEP: What are Republicans trying to do instead?

ROVNER: So instead, Republicans have said that if you have a break in coverage, if you want to buy coverage again, you'll have to pay a 30 percent higher premium for a year. But what analysts say, the problem with that is that then healthy people really won't come in because now they're looking at...

INSKEEP: Really steep prices.

ROVNER: Right. And so they'll wait until they get sick to buy in.

INSKEEP: Is it entirely clear to people in the industry that this is going to work?

ROVNER: It is not entirely clear to people in the industry that it's going to work. And this is one of the reasons I think Republicans keep calling this bill a work in progress.

INSKEEP: Julie, thanks very much.

ROVNER: Thank you.

INSKEEP: She's with Kaiser Health News. And she will be back next week to take another of your questions about the health law and the effort to change it. You can tweet us @MorningEdition using the hash tag, #ACAchat. Transcript provided by NPR, Copyright NPR.