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Jean, an Arizona teacher whose employer provided group health benefits but did not contribute to the cost for family members, gave birth to her daughter, Alex, in 2004 and soon after applied for an individual policy to cover the baby. Due to time involved in the medical underwriting process, the baby was uninsured for about 2 weeks. A few months later, Jean noticed swelling around the baby’s face and eyes. A specialist diagnosed Alex with a rare congenital disorder that prematurely fused the bones of her skull. Surgery was needed immediately to avoid permanent brain damage. When Jean sought prior-authorization for the $90,000 procedure, the insurer said it would not be covered. Under Arizona law, any condition, including congenital conditions, that existed prior to the coverage effective date, could be considered a pre-existing condition under individual market policies. Alex’s policy excluded coverage for pre-existing conditions for one year. Jean appealed to the state insurance regulator who upheld the insurer’s exclusion as consistent with state law.
People hate Obamacare. People in “real” America really hate Obamacare. Kaiser Family Foundation convened a series of focus groups in counties that voted for Trump to find out what EXACTLY Trump voters hated about Obamacare (article found here). They hated that those that were really poor and on Medicaid didn’t have the same barriers to care (high co-pays and deductibles) as did those who were working hard. This was even when the groups included voters on Medicaid. They hated how expensive their premiums were, how high their co-pays were, and how much was not covered. They hated how complex the system is and how when you think you have it figured out someone throws another thing at you. They hated the mandate to purchase insurance.
There is currently a bill being formulated to “repeal” significant parts of the ACA and replace it either with a “To Be Named Later” or with a mismash of proposals which would be labeled “replacement.” How pre-existing conditions fit into this bill remains unclear but is worth understanding (Kaiser article here). Prior to the passage of the ACA, insurance companies were state regulated, and in all states were able to do medical underwriting, This meant that they could effectively eliminate people with preexisting conditions. Although it would be possible to repeal the ACA and keep in the current underwriting rules, it is not likely this will happen. In the case of our pre-Obamacare insurance at our work, the “lookback” was “270 days, known or unknown, manifest or unmanifest.” This meant that, the human gestation being 270 days from conception, if you had your first day of work and went home and celebrated with your significant other (and one thing lead to another) you had best hope the baby was a week late. If not, you were paying cash. Much worse was the patient we had whose cancer was manifest 4 months after his employment commenced and we got to tell him that he had to pay $100,000 up front or die of his cancer. Kaiser estimates that 52 million people will be denied coverage if the old rules are put back into place. Perhaps not denied outright but effectively denied by bringing back these old favorites:
- Rate-up – The applicant might be offered a policy with a surcharged premium (e.g. 150 percent of the standard rate premium that would be offered to someone in perfect health)
- Exclusion rider – Coverage for treatment of the specified condition might be excluded under the policy; alternatively, the body part or system affected by the specified condition could be excluded under the policy. Exclusion riders might be temporary (for a period of years) or permanent
- Increased deductible – The applicant might be offered a policy with a higher deductible than the one originally sought; the higher deductible might apply to all covered benefits or a condition-specific deductible might be applied
- Modified benefits – The applicant might be offered a policy with certain benefits limited or excluded, for example, a policy that does not include prescription drug coverage.
Some have suggested that a “high risk pool” would allow these folks to obtain coverage and keep the cost down for the 50% of the population who have no need to access the healthcare system in a given year. We actually tried that before, turns out. As the Kaiser article points out, these didn’t work for a number of reasons. First is the nature of health care expenses. Some folks have a lot of expense in a single year (car crash) and the next year are perfectly fine. Others have a lot of expense in an ongoing fashion for a very long time (think Magic Johnson and HIV).
Planning for these disparate situations was tough and no one got it right. The reasons for failure included:
- Premiums above standard non-group market rates – All cost a lot, the states with the most success provided a substantial subsidy.
- Pre-existing condition exclusions – Once again, how do you deal with folks who wait until they get sick to pick up a policy
- Lifetime and annual limits – Most ranged from $1 million to $2 million and others imposed annual dollar limits on specific benefits such as prescription drugs, mental health treatment, or rehabilitation.
- High deductibles – The plan options with the highest enrollment had deductibles of $1,000 or higher.
The conclusion was that they could work but it’ll cost a lot to get it right.
Back to the focus groups. What Trump voters said they wanted was low premiums and little out-of-pocket expense for drugs, visits, and procedures. They wanted no mandate and no increase in taxes but felt that not covering pre-existing conditions was “un-American.”
They expressed confidence that as a businessman President-elect Trump could pull this off. Hope they are correct.
The Affordable Care Act is under assault in the House of Representatives and the administration is fighting back. The Department of Health and Human Services has issued a report that documents the effects of the repeal of the bill, found here. The investigators found that
Rescinding the new health insurance protections would, now and starting in 2014:
- Reduce the health care and health insurance options of the 50 to 129 million Americans with pre-existing conditions;
- Take away, for the 32 to 82 million people with both a pre-existing condition and job-based insurance, the ban on lifetime limits on benefits, restrictions on annual limits on benefits, new protections in the small group market from discrimination based on health status, and the security of knowing you can change jobs without losing your health coverage and care;
- Lock older Americans into their current coverage if they have it, since up to 86 percent of people ages 55 to 64 have some type of pre-existing condition;
- Limit insurance options for the parents of the up to 2 million uninsured children with pre-existing conditions, who today can no longer be blocked from purchasing individual market insurance due to their pre-existing condition.
Having cared for people who were denied insurance for preexisting conditions, I can attest to the tenacity of insurance companies in seeking out folks attempting to receive care for illnesses. The statement in our insurance is “known or unknown, manifest or unmanifest” meaning these are not people trying to scam the system, in my experience thaes are people who have a cancer growing inside of them that comes out up to 9 months after taking the job. Prior to the passage of the ACA and until 2014, it kinda sucks to be them.
In a separate article posted on Forbes, Rick Ungar writes on the Republican alternative. I had feared it was to let sick people suffer the consequences of their poor life choices, but it is apparent that the public likes not having the pre-existing condition clause. The Republicans claim to have developed an alternative. He writes
Their answer is to create government supported high-risk insurance pools, operated by the states and funded with federal financial assistance for those with pre-existing medical conditions.
To examine this properly (and you should as the proposal is not without merit), you’ll have to get past the irony that the party of small government wishes to expand government involvement in health care in order to solve the problem of too much government in health care. I know…it’s confusing. However, if you can put this bit of weirdness aside, read on.
He goes on to say that these pools exist today and are poorly funded and underutilized. This is because they have a rather long (12 month) waiting period and are often closed to enrollment for months to years at a time. Oh, yeah, and it’ll cost 10 billion dollars in new taxes to begin to set them up and it’ll perpetuate the current fee-for-service mess. Aside from that, a really good idea.
From a statement I found in the comments
Careful examination of the facts show that those whom are truly unable to obtain healthcare coverage are not nearly the many millions quoted by the sycophant media. Many are either illegally in our country, young and not covered by choice, or temporarily/by choice not covered for a short amount of time. Medicaid covers the truly needy (as well as those taking advantage inappropriately of Medicaid due to the abysmal administration of Medicaid).
I know based on data that these are not true statements but are they are certainly “deeply held beliefs” in some circles.
There seems to be an attitude that people who happen to be sick (and many are poor) are that way because of their own culpability or are trying to scam the system to avail themselves of free health care. It is important to people with this belief that undeserving sick folks are made to pay for their healthcare. If we want to prevent every “undeserving” person from obtaining any subsidized health care then I suppose fighting against providing care to people who have the misfortune of getting a job with insurance before their cancer came to the surface makes sense in some warped way. This is how our Senator sees it
[There is a] “big difference between those that have pre-existing conditions and those that are actually negatively affected by them.”
I invite him to follow me while I see some patients one day and see if he can tell who is deserving and who is not.