Friday, May 05, 2017

The New Republican Health Plan and Pre-Existing Medical Conditions

Does the House Republicans' health insurance plan let people with pre-existing conditions buy health insurance that they can afford AND that covers their actual medical needs, without forcing those individuals to choose between medicines and food?  That's what our dear Leader has promised us.

The answer to that question is most likely NO.  All the noise around it is created to hide that very fact.

To see why, note, first that under this new plan states can ask for three different types of waivers from the ACA regulations, if they can prove that

doing so will reduce average premiums, increase enrollment, stabilize the health insurance coverage market or increase the choice of health plans in the state. One of those waivers applies to pre-existing conditions, allowing insurers to use "health status" -- that is, current health, health history and other risk factors -- to set insurance premiums.
Note how easy it would be to argue for such a waiver!  If you get rid of those people who cost more, of course the average premia of those who remain will go down!  And see how easy it is then for insurers to set premia according to one's existing state of health, a.k.a. based on pre-existing health conditions.

This could result in extreme charges for a very basic health insurance policy, perhaps as much as 

$71,880 extra for a patient with lung cancer, and $17,060 extra for a pregnant woman, forcing many to be priced out of coverage and wind up uninsured. 
The plan proposes that states then create pools for those unfortunate high-risk cases.  Such pools have fared poorly in the past, offering limited coverage at exorbitant prices, and it's unlikely they would fare any better now:

In addition to its poor design, the funding for the invisible risk pool is a drop in the bucket compared to the massive increase in enrollee health care costs as a result of the ACHA. Spread over nine years and across millions of enrollees, we estimate that the $15 billion fund could lower annual premiums by about 1 to 2 percent each year, or roughly $100 per enrollee annually. Because the AHCA substantially reduces subsidies and shifts costs onto consumers, even without stripping protections for pre-existing conditions the average enrollee would still see their total costs rise by more than $3,000 by 2020.

To return to the first sentence in this post:  It doesn't matter that people with pre-existing conditions cannot be denied coverage, if they can be charged almost anything for that coverage and/or if what coverage they can buy does not apply to their actual medical needs.

It's unlikely that the Republican House bill ends up used as the real blueprint, but if that happens the most likely outcome would be that many individuals with pre-existing conditions would be priced out of the insurance markets altogether, and a certain number of them would die earlier than would have been the case under the Affordable Care Act (Obamacare).  Those early deaths are a bizarre way of saving money, and so is a plan aiming at insuring only the healthy against the expenses of illness.