Apr 27, 2017

What the new House GOP plan really does on pre-existing conditions

Mel Evans / AP

Every news article I read about the House GOP health care compromise suggests that it would allow states to waive the Affordable Care Act's pre-existing condition protections. That is not what the amendment would do. Nor would it allow insurance companies to charge higher premiums for people with a health condition in all cases.

All the amendment would do is to allow insurance companies to charge higher premiums for individual market customers with a health condition, but only in cases where they did not maintain "continuous coverage." And it's critical to understand the difference.

The back story: Under the ACA, insurance companies are prohibited from developing premium rates based on an individual's health condition. Premium rates can only vary by age, by tobacco use, by geography, and by family size. These rules apply to individual market plans and "group" plans offered by small employers.

What the amendment really does: Previous discussions of a possible compromise between Reps. Tom MacArthur, a leader of the moderate Tuesday Group, and Freedom Caucus Chairman Mark Meadows suggested that states would be able to let insurers charge higher premiums for all individual market plan holders with a health condition.

But the actual amendment doesn't do that. Instead, the amendment would give states the option to allow the insurance companies to charge higher premiums for a person with a health condition only if they (1) lose their health coverage and (2) fail to obtain new health coverage within 63 days.

This means that the protections against being charged higher premiums for a health condition are preserved for every individual market plan holder who maintains continuous coverage. These protections would also be in place for new enrollees (so long as they maintain continuous coverage going forward).

The safety net: Some have argued that if insurance companies can charge higher premiums for a health condition, vulnerable people would be "priced out of the market" by making their health coverage unaffordable. I agree with this argument. And, it appears that MacArthur and Meadows agree as well.

Which is why the MacArthur-Meadows amendment says a state can only let insurers charge higher premiums if it establishes a "high-risk pool" or participates in an "invisible high-risk pool" program (which compensates insurers for covering expensive patients and would be funded at $15 billion).

Why is this significant? Because for those people with health conditions — who do not maintain continuous coverage, and who are therefore charged higher premium rates — they will always have "access" to health coverage, even if they are "priced out of the market."

I recognize that high-risk pools have been problematic in the past. Historically, high-risk pools have had funding deficiencies. In addition, the coverage offered through a high-risk pool has sometimes been inadequate.

And therefore, it is reasonable to oppose this new compromise amendment because — based on past precedent — high-risk pools haven't worked. (Although the GOP bill does provide $100 billion for the Patient and State Stability Fund, to set up high-risk pools, and an additional $15 billion for maternity care/newborn coverage and mental health/substance use disorders).

But to claim that the MacArthur-Meadows amendment takes away protections for people with pre-existing conditions — and fails to protect people with a health condition — is incorrect.

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