Don’t deny insurance to sick people. There are other ways to reduce health care costs.
Denying insurance coverage to people with pre-existing medical conditions is the wrong way to reduce health costs. There are other solutions and we should try them.
It’s hard to think of a law that’s been more controversial in the last decade than the Affordable Care Act, also known as Obamacare. Yet as the country continues to endure bitter division over the ACA, one provision remains extraordinarily popular: the requirement that insurers cover those who are sick. Even in the thick of the Obamacare debates a decade ago, 80 percent of Americans agreed the federal government should require insurance companies to offer coverage to everyone, regardless of their pre-existing illnesses and conditions.
As Americans prepare to vote in a midterm election where polls show health care is a top issue, they will need to decide whether they want to choose candidates who would permit discriminating against sick people and support undoing the progress we’ve made on one of the few policy issues where the country has managed to find consensus.
Before the ACA, commercial insurance companies had free rein to delay or deny insurance coverage to people with medical conditions. Approximately 50 million people had pre-existing conditions that put them at risk of losing coverage. For example, a patient with cancer could be told that payment would be denied for all of their health care costs related to cancer (drugs, outpatient visits, hospitalizations). In some cases, when changing jobs, health insurance companies could deny coverage to the patient altogether.
Covering pre-existing conditions is costly
This was done for economic reasons: health insurance premiums would be lower if insurance for sick patients could be delayed or denied altogether. The policy seemed cruel, but it also was effective in getting healthy people to buy insurance. With the pre-existing condition exclusion, if a woman became pregnant and had an automobile or skiing accident and was uninsured, these conditions could be excluded from future insurance coverage for at least a year.
When the pre-existing condition exclusion was eliminated — and insurers were forced to offer coverage to everyone — insurance rates soared. Annual rate increases have grown from 5 percent to 19 percent over the course of the last decade. Getting rid of the pre-existing condition exclusion was morally correct but very expensive.
In recent weeks, conservatives have pushed a “Health Care Choices” plan, another Obamacare repeal effort that includes changes previously rejected on Capitol Hill. Critics say it would reduce health care coverage for many and threaten those with pre-existing conditions. “Rather than promoting competition and choice, this proposal would result in millions of people, especially the working poor and those with pre-existing health conditions, losing access to health care coverage,” a joint statement of physicians groups said.
Meanwhile, 20 state attorneys general have filed a lawsuit and are making the case that Obamacare is unconstitutional and insurers should, once again, be permitted to deny coverage to those with pre-existing conditions. The Trump administration has signaled its support for this argument.
Why are lawmakers throwing their weight behind a movement to declare Obamacare unconstitutional? If they win, the pre-existing condition exclusion would be back. It’s difficult to imagine that any of those bringing the lawsuit actually think denying coverage to those with cancer is a good idea. However, insurance premiums have skyrocketed, and they could come down with the return of the pre-existing condition exclusion.