Recently, we read Congressman Andy Barr’s talking points about the House-passed bill called the American Health Care Act in which he asserts that pre-existing conditions will be covered under the bill’s provisions.
This talking point is, unfortunately, fatally flawed.
If states elect to jettison the Affordable Care Act’s (or Obamacare’s) insurance market reforms, then a major loophole will emerge that wreaks havoc for those with pre-existing conditions. In states that do away with the ACA’s reforms — and we expect many Republican-controlled states might — the days when insurance companies imposed premiums based on a person’s health status are certain to return, regardless of whether the person has a high-cost pre-existing condition or not.
As a result of this return, premiums for health insurance will undoubtedly become cost prohibitive to many people. This makes the one sentence in the bill, inserted to win over wavering Republicans, that prohibits insurance companies from refusing to cover pre-existing conditions illusory, at best.
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Under the AHCA bill, states that abandon the ACA’s insurance-market reforms must choose to create “high risk pools” or join a new federal government-established risk-sharing program, both of which choices are intended to provide coverage to individuals with pre-existing conditions who will inevitably be priced out of the commercial market.
However, in Kentucky, as in other states, we have had experience with high-risk pools and risk programs before. They don’t work as intended. High-risk pools are invariably underfunded, and as a result, they have to impose fairly stiff premiums, which in turn causes individuals with merely marginal high-risk conditions to opt out, leaving only the sickest and most expensive in the pool, and requiring even higher premiums to be set, causing even more individuals to be priced out. Simply put, high-risk pools, as with the new federal risk-sharing program, will require substantial funding, but the House bill does not provide anything close to that adequate funding. Without adequate funding, they haven’t worked before, and they won’t work now.
In the end, the AHCA’s purported ban on excluding people with pre-existing conditions is illusory, and appears to have been inserted to provide the cover of a “talking point” to the bill’s proponents. The talking point does not, however, truly answer how people with pre-existing conditions will be protected from becoming effectively uninsurable through exorbitant, health-status based premiums.
The bill furthermore fails to provide adequate funding for the high-risk pools and risk-sharing arrangements included within it to provide effective insurance products for those with pre-existing conditions.
Finally, if this bill became law, we would return to the days when obtaining health insurance required a lengthy health condition questionnaire and, occasionally medical examinations, to ascertain whether an individual could even get insurance; do we really want that intrusive method for health insurance decisions back?
Based on our analysis of the AHCA and knowledge of the health-insurance market, it is not unduly partisan nor unfair to ask proponents of this bill to answer the hard questions about its illusory protections of people with pre-existing conditions, particularly when so many Republican candidates, including the president himself, ran on promises not to “replace” the ACA with something that reverses the current ban against pre-existing conditions. The bill, passed by the House, would do just that.