Obamacare: The dirty little secret of "repeal and replace"
Republicans are in a frenzy over repealing and replacing the Affordable Care Act -- indeed President-elect Trump announced Tuesday that he wants a repeal vote as soon as next week. But an important constituency may be overlooked: patients with preexisting conditions.
That’s the case even though many GOP Congress members and Mr. Trump have promised that this one plank of the ACA is here to stay: People with preexisting health conditions who buy their own insurance will continue to get coverage. This provision is a hallmark of Obamacare, which prohibits insurers from turning away the sick or charging them more for premiums.
Guaranteed coverage is also one of the costliest aspects of health insurance because, naturally, sick people use the most health care, and their costs outweigh the amount in premiums they pay. That’s why the ACA mandated that all Americans get health care coverage or face a penalty. Making sure the pool of insurance customers included enough young, healthy people to support the sick and elderly was the thinking behind what became known as “the individual mandate.”
It was also the reason for government subsidies that made insurance more affordable for many middle- and low-income people, including the young and healthy.
Whether the mandate worked is subject to debate. Many argue that not enough healthy people signed up for coverage even in the face of penalties, causing insurers to leave the individual marketplace altogether or charge higher premiums for the coverage they do provide. Republicans envision an Obamacare replacement without an individual mandate or subsidies.
So where does that leave patients with preexisting conditions? According to a Kaiser Family Foundation Health Tracking Poll, 49 percent of respondents said they or a family member have a preexisting condition. President-elect Trump has yet to offer a detailed plan for replacing Obamacare, but House Speaker Paul Ryan has provided some specifics.
According to Ryan’s plan, people who keep paying for continuous health care coverage (throughout job loss, etc.) won’t lose their health care benefits, even if they have a preexisting condition. But maintaining continuous coverage can be tricky.
“You may be in the hospital and lose track of a bill,” said Cheryl Fish-Parcham, private insurance program director at the patient advocacy organization Families USA. “Or you may be suddenly unemployed, lose coverage and not be able to afford individual coverage,” she added.
For sick patients who cannot continue coverage, Ryan’s plan calls for a return to state-run high-risk pools. These pools allow sick people to buy insurance separately, while states, insurers and the federal government help subsidize the cost. The president-elect’s website says he supports risk pools.
Risk pools have a long and controversial past. Before the ACA was passed, 35 states ran risk pools for people with preexisting conditions ranging from cancer and diabetes to more minor afflictions such as arthritis or eczema. Premiums for risk pool coverage were as much as 250 percent more than a healthy person would pay for individual insurance, and some states, overwhelmed with sick patients, had wait lists for coverage or imposed other restrictions, said Fish-Parcham.
“Going back to risk pools is going back to the bad old days,” she said.
Expense wasn’t the only problem. Even when the few patients who could afford it paid ultrahigh premiums, coverage was often lacking. It wasn’t unusual for people with a preexisting condition to wait six months to a year before coverage for that condition would kick in, Fish-Parcham explained.
Or there might be a lifetime maximum on the benefit related to a preexisting condition, she added. So, if you had a stroke and needed a year of rehab, your insurance might not have covered the entire bill.
Ryan’s plan would ban wait lists and put a cap on risk pool premiums. In addition, he’s calling for $25 billion in federal funding to help states pay for risk pools. But many health care experts wonder if that’s enough to cover the number of estimated people with preexisting conditions.
“High-risk pools served only 1 percent of the population back in 2008,” said Fish-Parcham. That wasn’t anywhere near the number of people who needed coverage but couldn’t afford it, she noted, adding: “Risk pools simply didn’t work.”
It will be up to the president-elect and repeal-and-replace advocates to show how, this time around, risk pools might be different.