Before the Affordable Care Act’s key provisions took effect in 2014, if you applied for an individual major medical plan you faced the prospect of being charged more in monthly premium or denied coverage altogether if your health history included pre-existing conditions.
A pre-existing condition is any health concern (e.g., diabetes, depression, cancer) for which you’ve sought medical care prior to starting a health insurance policy.1 An estimated 27% of adults under age 65 in the United States have a pre-existing condition.2
The Affordable Care Act (ACA) established that individuals with pre-existing conditions cannot be denied coverage or charged more for individual major medical insurance plans. The law allows insurers to set rates based only on age, location, tobacco use, individual vs family enrollment, and plan category.3
Now, due to recent actions by the Trump Administration to dismantle the Affordable Care Act,many wonder if we’re heading back to the way things were before ACA protections for people with pre-existing conditions became law.
3 recent political events behind this concern
To be clear: Protections for pre-existing conditions have not been repealed as of the publication of this article. However, the following events have caused concern that they may be in danger:
The Trump Administration’s failure to defend Texas v. Azar
In February, Texas and 19 other Republican-led states brought forth a lawsuit arguing that the individual mandate tax penalty repeal, which Trump signed into law on Dec. 22, 2017, should invalidate the entire ACA.4
The U.S. Department of Justice, in June, stated that it would not defend the law in this case. If Texas wins the case, pre-existing conditions protections could be lost and an estimated 52 million people with pre-existing conditions could lose coverage, pay higher premiums or be stuck with their current health insurance plan, according to Reuters.5
A new rule expanding the availability of association health plans
Earlier this year, the Trump Administration proposed a new rule that would make it easier for small businesses to obtain coverage through association health plans. Association health plans don’t have to adhere to all ACA provisions and could, in theory, provide fewer benefits.6
In June, President Donald Trump approved this rule, and starting September 2018 it will be phased in.7 While association health plans cannot discriminate against those with pre-existing conditions, there are concerns that they may create “roadblocks in finding affordable, comprehensive coverage.”8
Why? For starters, fewer benefits could mean sicker workers don’t have access to the care they need.9 Also, the final rule allows companies that provide association plans to charge higher premiums based on industry, as well as to discriminate based on gender, age and location.10
A proposed rule expanding the length of short term policies
Also earlier in 2018, the Trump Administration issued a proposed rule that would lift the 90-day limit for short term medical policies. On Aug. 1, 2018, the Departments of Health and Human Services, Labor and the Treasury issued a final rule lifting Obama-era limits on short term health insurance plans.11
Again, this does not directly repeal pre-existing condition protections that apply to individual major medical insurance (often called Obamacare or ACA plans). What it does is make it possible for people to obtain short term health insurance coverage for 30 to 364 days (limits may vary by state and not all states allow for 364-day durations).
Most short term plans do not include benefits for pre-existing conditions (though, some on the market include limited benefits for certain pre-existing conditions), and applicants for short term plans can be denied coverage or charged more based on their health history.
That said, short term health insurance plans are appealing because they may cost as little as 20% of the least expensive Obamacare plan12 and provide benefits that help with out-of-pocket medical expenses resulting from unexpected illnesses and injuries.
Learn more about short term health insurance plans, get answers to frequently asked questions and read about the pros and cons of this coverage type.
Potential impact of weakening pre-existing conditions protections
If provisions that protect people with pre-existing conditions were lifted, how many would be uninsurable under pre-ACA underwriting standards?
A study by The Henry J. Kaiser Family Foundation estimates that roughly one quarter (27%) of adult Americans under age 65 have health conditions that would make them uninsurable.13 The Kaiser Family Foundation calls this a conservative estimate.14
In a separate poll, also conducted by the Kaiser Family Foundation, 53% of respondents said that they or someone in their household had a pre-existing condition.15
What does this mean for you? If pre-existing conditions protections are repealed or weakened and you’re denied individual major medical coverage or experience a rate increase you may need to consider additional coverage options such as employer-based health insurance plans, Medicaid or Medicare, or alternative health insurance such as a hospital plan.
Summary + next steps
The expansion of association health plans and the extension of short term policy limits could make health insurance coverage that doesn’t provide comprehensive coverage more widely available.
And while protections for pre-existing conditions have not yet been removed and nobody knows if this will come to pass, it would certainly deal a significant blow to the ACA.
Support for pre-existing condition coverage is high. As Reuters reports, 84% of Democrats, 68% of independents and 59% of Republicans support pre-existing condition protections.16 But will lawmakers fight to keep them?
We’ll be keeping a close eye on this issue. As this and other ACA-related news unfolds in the months ahead, we’ll be here to help explain the impact on you and your family.
If you have specific, immediate concerns about your health insurance plan or any coverage you are considering, contact a health insurance producer (i.e., agent or broker).