Health Care Reform and the Pre-Existing Condition

Before HIPPA Title 1 was passed in 1996, if you had a pre-existing condition and lost your job or got divorced, or anything that forced you out of your group health insurance plan, you were uninsurable.  Why? Because insurance companies could deny people with pre-existing conditions individual coverage. 

When the government passed HIPPA Title 1 its goal was to improve Americans access to health care.  And in some ways it does.  A good example is its offering of group coverage to exiting employees through employer-sponsored (COBRA) accounts so former employees are covered while in-between jobs.   But the reform for pre-existing conditions, although sounding good on paper, falls short of ending discrimination in a number of ways.  

First, because the HIPPA Title 1 law doesn’t hold insurance companies accountable to any standards, they’re free to charge prohibitive premiums for ineffectual policies – ones that often exclude the pre-existing condition.  

 Second, HIPPA 1’s states any lapse between the loss of group status and enrollment in an individual plan is cause for denying coverage.     

Third, HIPPA 1 ‘s protections are only for those who’ve already had health insurance with no provision to help the millions of uninsured needing coverage.

From what we know so far, Romney’s plan isn’t substantially different than the existing law -- including its shortcomings. 

Like HIPPA 1, Romney’s plan requires continuous insurance coverage to be assured coverage.   Yet we know breaks in health coverage for Americans are common.  The Commonwealth Fund reported that from 2004-2007, 89 million Americans or more than one third Americans younger than 65, lost insurance for at least one month, with 23 million of those having more than one lapse in the four-year period. 

Romney speaks of expanding coverage for Smaller and Individual markets.  But like HIPPA 1, his plan makes no mention of cost control mandates, the absence of which, consumer advocates say,  will keep insurance, for many, still unaffordable.

His option for the 25 million Americans presently uninsured with pre-existing conditions is high risk pools, which are expensive   --  $10 to $20 billion per year according to 2008 estimates  -- and whose structure continues to lead us down the wrong path, separating risk rather than spreading it* 

It is no wonder the insurance industry supports ACA’s individual mandate.   By supporting the industry’s business model for widening risk through large enrollments of both healthy and sick people in order to lower costs while still maintaining a viable business, ACA gets our health care system moving in the right direction. 

Starting in 2014, under the ACA, the one in five non- elderly adults with pre-existing conditions will be able to obtain affordable health insurance if they become self-employed, take a job without group insurance, or have a life change like divorce, retire or move to another state.   Insurers in the Individual and Small group markets will no longer be able to deny coverage, exclude pre-existing conditions, charge higher premiums and set lifetime limits on benefits.  This is important now that more people are seeking individual plans as the number of employers offering job-based insurance has decreased.

 Mr. Romney said he would keep the popular provision in President Obama’s health law that “makes sure those with pre-existing conditions have access to new insurance if they change or lose their job.  But what Romney is proposing, isn’t the same as ACA’s pre-existing condition policy at all. 

I think we’d all be wise to follow the advice of Linda Blumberg, a health economist at the Urban Institute, to pay closer attention to the exclusions attached to Governor Romney’s proposals regarding pre-existing conditions before deciding which we want to support.

*Note:  To provide health care to the uninsured with pre-existing conditions until the 2014 mandate kicks in the Administration set up a temporary high-risk pool

Program the Pre-Existing Condition Insurance Plan (PCIP), which has already saved thousands of lives by covering services, like chemotherapy.