New White House proposal would put 4-12 million Americans at riskRobert M. Goldman, CFA
According to news reports, today, Vice President Pence and other White House officials presented an idea to a Freedom Caucus meeting to allow states to choose to apply for waivers to repeal two ACA regulations.
Those two regulations detail ACA’s essential health benefits, which mandate which health services insurers must cover, and “community rating,” which prevents insurers from charging people with pre-existing conditions higher premiums.
So, under the White House proposal, insurance companies could charge Americans with pre- existing conditions as they will for insurance coverage, although the proposal also includes a so-called stability fund which states could use to reducing insurance premiums.
Under the White House proposal, then, it seems to me that Americans, paying for their own healthcare insurance, with pre-existing conditions can certainly expect higher premiums and fewer coverage options.
How many Americans with pre-existing conditions are there? Estimates of course vary. The Centers for Medicare and Medicaid Services in a report entitled, “At Risk: Pre-Existing Conditions Could Affect 1 in 2 Americans” estimates about half of all Americans would meet the insurer’s definition of pre-existing condition and this percentage increases with age (up to 86% for the 55-64 year age group).
According to a December 12, 2016 Kaiser Family Foundation report entitled, “Pre-existing Conditions and Medical Underwriting in the Individual Insurance Market Prior to the ACA,” an estimated 52 million adults (27% of all adult Americans under the age of 65) have pre-existing conditions that would make them uninsurable pre-ACA. Most of these individuals are covered under job-related group plans or Medicaid, but the same Kaiser Family Foundation report suggests 8% of the non elderly (under the age of 65) population self pay for insurance coverage (2015).
Taken together, then, it looks to us that 4-12 million Americans are self paying for healthcare insurance and have pre-existing conditions of the type that would make them uninsurable pre ACA. These 4-12 million Americans may still have access to healthcare insurance under the White House proposal, but likely at far greater cost and with fewer coverage options than these 4-12 million Americans now experience.
So there’s the debate. Do the majority of Americans (through their elected representatives) want to lower their own healthcare costs at far greater cost for a minority? My guess is no, but it will be an interesting debate.