Patient Groups, Doctors, and Experts Agree: Amendments to Trumpcare Would Remove Guarantee for Affordable, Quality Health Coverage for Americans with Preexisting Conditions
American Medical Association: AMA Warns Proposed Changes to AHCA Do Not Remedy Bill’s ShortcomingsMay 3, 2017
The Affordable Care Act (ACA) Ended Discrimination Against Those With Pre-existing Conditions
Before the ACA, people with pre-existing conditions were either offered much more expensive premiums than they would otherwise receive or offered plans that did not cover important benefits. Some were outright denied coverage.[i] The ACA created two provisions to protect people with pre-existing conditions:
- Community rating provision: stipulates that a health insurer must rate a community as a whole in terms of expected health care costs, and offer the same premium rate to all people living in that region. Premiums are only allowed to vary based on age, tobacco use and geographic location. Charging a person more based on their individual health status is prohibited.
- Essential health benefits requirement: created a set of ten types of benefits that all health insurance plans must offer. No longer could a person be offered insurance that did not provide coverage for a common and critical condition.[ii]
The American Health Care Act (AHCA) Amendments Would Take Away Guaranteed Affordable Coverage for Those With Preexisting Conditions, and Eliminate Coverage of Essential Health Benefits
The amendments from Congressmen MacArthur, Meadows and Upton make two key changes that affect people with pre-existing conditions.
- MacArthur Amendment: Would allow states to obtain waivers that permit insurers to engage in medical underwriting (instead of community rating), meaning that insurers could once again charge higher premiums to those with pre-existing conditions. If a state obtains a waiver, it must create a high-risk pool that would provide some degree of financial assistance to those people who face higher premiums because of a pre-existing condition. [iii] The AHCA provides $130 billion of funding for the high risk pool over 10 years.[iv]
- The amendment would also permit states to define their own set of essential health benefits, allowing insurers to sell plans that exclude coverage for certain types of services such as maternity care, prescription drugs and substance abuse treatment.
- Upton Amendment: Would add an additional $8 billion to help state governments struggling with hard-to-insure populations.[v]
Effect of MacArthur and Upton Amendments on People with Pre-existing Conditions
Individuals with pre-existing conditions would see significant premium increases: Estimates from the Center for American Progress found that people would face dramatically higher premiums than they currently do. For example, a person with metastatic cancer is projected to see a 3,500 percent premium surcharge, more than $140,000 in additional costs. A person with major depressive and bipolar disorders could expect their premiums to double. An individual with drug dependence would see a 502 percent premium surcharge, and someone with congestive heart failure would see a 459 percent premium surcharge.[vi]
Millions could be affected: A study from the Kaiser Family Foundation found that 27 percent of adults under the age of 65 have health conditions that, without the protections offered under the ACA, would render them uninsurable in the individual market.[vii]
AHCA’s high-risk pools are underfunded: Experts agree that the AHCA’s funding of $130 billion over ten years (or $138 billion with the Upton amendment) for the high-risk pools is nowhere close to adequate. Harold Pollack, an expert on high-risk pools at the University of Chicago, believes that high-risk pools would need $24 billion in annual funding - $240 billion over ten years – to provide adequate coverage to those with pre-existing conditions.[viii]
High-risk pools have largely failed in the past: A total of 35 states have attempted high-risk pools, and as of 2011, net losses were over $1.2 billion and limiting enrollment was a key and necessary strategy to limit further losses.[ix] Some states had to deny more than 80 percent of people referred to the high-risk pool, and others had caps on coverage as low as $75,000 per year.[x]
Additional Harm from MacArthur and Upton Amendments on All Americans:
Caps on annual out-of-pocket costs would be weakened or eliminated: The ACA banned annual and lifetime limits for coverage, as well as instituted a cap on annual out-of-pocket costs. However, this ban only applies to care that is considered an essential health benefit. As states roll back or eliminate essential health benefits, then these bans would also be rolled-back or eliminated and individuals could again face insurance that puts on limit on the care they receive and no cap on how much a person will pay out-of-pocket.[xi]
Would eliminate bans on lifetime limits and out-of-pocket caps for employer-based coverage: To determine essential health benefits for employee coverage, large employers are allowed to apply any state’s definition of essential health benefits for defining the scope of the ban on annual and lifetime limits and the out-of-pocket spending cap. Should the MacArthur amendment pass, large employers would be permitted to cherry-pick states that offer the least generous essential health benefits, thereby subjecting their employees with pre-existing conditions to a potential loss of coverage for their condition or dramatic health care costs. Large employers account for 86 percent of total enrollment – 110 million people – in private employer plans.[xii]