Let’s take a closer look at implications for people with pre-existing conditions.
Many of you may have woken up to the news today that Representative Tom Price of Georgia has been nominated for Secretary of Health and Human Services (HHS). In Trump’s statement he called Price “exceptionally qualified to shepherd our commitment to repeal and replace Obamacare and bring affordable and accessible health care to every American.” Representative Price was elected to Congress in 2004, he is an orthopedic surgeon, and from his own bio, is “devoted to limited government and lower spending.” This appointment is an ominous sign for the Affordable Care Act (ACA).
In case you were wondering, Speaker Paul Ryan is on board with the nomination, issuing a strong statement of support this morning, (i.e., “This is the absolute perfect choice”). The two of them are close. According to an article from the Atlantic, prior to their current leadership positions, Paul Ryan, Tom Price, and fellow Republican Representative Jeb Hensarling (TX) met weekly to discuss policy, among other things, in what came to be known as the Jedi Council.
As Chair of the House Committee on the Budget (Speaker Ryan’s former gig), Representative Price has been a staunch leader of the repeal and replace Obamacare effort. He has his own legislation, Empowering Patients First Act that differs in many ways from Paul Ryan’s A Better Way proposal. Sarah Kliff from Vox outlines some of the key components of Price’s replacement plan. Over the coming days, I will dig a bit deeper into some of these features. First on that list, is how Price’s Empowering Patients First Act treats people with pre-existing conditions.
In order to understand these proposed reforms, let’s take a look at how the ACA changed coverage for people with pre-existing conditions. Prior to the ACA, health insurance companies in the non-group market (i.e., people who purchased coverage outside of employer-sponsored health insurance) could (1) deny health insurance for people with pre-existing conditions, (2) offer health insurance but exclude coverage related to specific pre-existing conditions, or (3) offer health insurance but charge people more based on their health status. The ACA fixed all three of these problems.
- Guaranteed Issue: The ACA required health plans to offer health insurance coverage regardless of individual health status or health care use.
- Pre-Existing Condition Exclusions: The ACA prohibited health insurance companies from excluding coverage for services related to a pre-existing condition either temporarily or permanently.
- Modified Community Rating. The ACA established federal limits on what insurers could take into account when setting premiums, allowing only four factors to be considered: individual vs. family enrollment, geographic area, age, and tobacco use. Health status could no longer be used to dictate how much a person paid in health insurance premiums.
Representative Price’s replacement plan legislation does not require that health insurers offer insurance coverage to people with pre-existing conditions, allows insurers to exclude coverage of services related to enrollees’ pre-existing conditions, and enables insurers to charge individuals more for that insurance coverage.
Price’s proposal explicitly states, “Nothing in this Act shall be construed to provide a mandate for guaranteed issue or community rating in the private insurance market” (p. 4). Specifically, this proposal enables health insurers to exclude coverage for pre-existing conditions if the person has not had 18 months of continuous credible coverage prior to enrollment (p. 150) and has received care or advice related to that condition in the six months prior to enrollment (p. 151). Moreover, insurance companies can charge individuals with pre-existing conditions premiums up to 1.5 times that of the “applicable standard rate” for the next two to three years of coverage (p. 151).
With respect to setting premium rates, health status is not the only concern. Due to modified community rating, current ACA requirements allow health plans to set premiums for older adults at rates no more than three times those of younger people. While Speaker Ryan’s proposal would up that ratio to five-to-one (p.21), Representative Price’s plan puts no limit on the amount health insurers could charge older people, instead defaulting to state requirements where they exist. So, health insurers could again charge older people significantly more for health insurance coverage.
Understanding Price’s position on coverage for people with pre-existing conditions is important for two reasons. First, we keep hearing that the Trump Administration will keep parts of Obamacare related to pre-existing conditions, and it is important to understand what that means. What Trump has proposed keeping is guaranteed issue (i.e., plans cannot deny someone health insurance coverage based on pre-existing conditions), and Ryan’s plan similarly protects this (p. 20). However, this critical provision is explicitly absent in Price’s legislation. While this does not define what an actual replacement plan will look like in the future, it does start to give us a sense of where Representative Price’s perspective fits in the broader narrative of Republican plans for health reform. Watch this space.
Second, providing actual protections for people with pre-existing conditions is not just guaranteed issue (AKA, offering insurance coverage), but instead requires that the coverage offered is both adequate and affordable. Representative Price’s plan as currently written undermines all three components designed to provide these protections.
To further understand the implications of current proposals for people with pre-existing conditions, stay tuned for blog posts detailing key provisions, including:
- Representative Price and Speaker Ryan’s proposals for high risk pools and how they relate to coverage of pre-existing conditions.
- How government sponsored tax credits would work in Representative Price’s plan compared to the ACA.
And implications of the Trump Administration’s leadership appointments for health care, addressing:
- The power of the Secretary of Health and Human Services to erode the ACA without assistance from Congress.
- Insights into Trump’s choice of Seema Verma to head Centers for Medicare and Medicaid Services (CMS).