As the latest attempts to replace the Affordable Care Act (ACA) generate increased debate over protections for pre-existing conditions, Kaiser Family Foundation highlights that using pre-ACA underwriting guidelines would result in an estimated 52-million Americans unable to obtain coverage

With the American Health Care Act (AHCA) clearing the House on the way to the Senate, the public and media are scrutinizing key points. One highly-contested topic is insurance availability for people with pre-existing conditions.

Unfortunately, as most pathologists and medical laboratory managers know, media coverage—whether from the left or the right—tends to play up points that are sensational and resonate with their core audiences, but often fail to provide a full and accurate picture of the subject being covered. Thus, it is refreshing when useful information and insights about aspects of healthcare in America are presented in a fair and measured way.

Biased media coverage is certainly true on the issue of health insurance coverage for individuals who are considered to have pre-existing conditions. However, as a December 2016 Kaiser Family Foundation (KFF) study highlights, protections for pre-existing conditions were not always guaranteed. In fact, if insurers currently used the medical underwriting practices in place prior to implementation of the Patient Protection and Affordable Care Act or ACA (also known as Obamacare), the study estimates that 52-million adults under the age of 65 would likely be denied coverage on the individual market.

According to US Census Bureau figures, at the start of 2017 there were 324-million Americans. Using KFF’s figures, this means that 16% of the population are considered to have pre-existing conditions.

Who is Impacted by the Individual Market?

KFF was quick to point out that many of the 52-million people with pre-existing conditions have always qualified for insurance through their employer or a public program such as Medicaid. The foundation’s estimates show that in 2015, only 8% of the non-elderly population relied on individual market insurance plans, such as those plans offered on the ACA healthcare exchange.

 graph above shows the percentage of American’s with pre-existing conditions who “most likely” would have been denied insurance in the Individual Marketplace

The graph above shows the percentage of American’s with pre-existing conditions who “most likely” would have been denied insurance in the Individual Marketplace prior to the Affordable Care Act (ACA). According to the Kaiser Family Foundation (KFF), while the proposed American Health Care Act (AHCA) does not enable insurance companies to deny coverage for these conditions, coverage premiums could increase if a state seeks a community rating waiver. (Image copyright: Kaiser Family Foundation.)

For many patients, obtaining health insurance through individual plans is often temporary and driven by a life event, such as job loss, divorce, marriage, or reaching the threshold of an age bracket for coverage through other programs. However, for some individuals—such as the self-employed, low wage earners, or early retirees—the individual market is the only option for obtaining health insurance. For this population, pre-ACA underwriting made coverage difficult to obtain and more expensive for patients with pre-existing conditions.

Pre-Existing Conditions Cover More than Just Conditions

Study authors also note that the estimate of 52-million individuals considered to have pre-existing conditions is conservative due to other factors considered in the underwriting process. Insurance companies also based denial and uprating on a range of other factors—such as:

  • Prescription medication;
  • Doctor visits or procedures;
  • Mental health conditions; and
  • Family history.

They list a table of 30 conditions, including pregnancy and eating disorders, that might qualify as a pre-existing condition along with a list of 40 medications that might also result in a denial of coverage.

Despite the already growing list of reasons for insurance denials, there’s yet another list with job occupations that might result in ineligibility. This means that even healthy individuals could find themselves without coverage due to how they earn their income.

Neither medications nor professions were considered in KFF’s estimates due to a lack of data.

Uncertainty and Instability in Individual Market Pricing

A 2001 KFF report showed yet another hurdle faced by enrollees in the individual market.

In this KFF study, researchers created seven hypothetical applicants and compared their conditions to the underwriting practices at major insurance companies. Even if applicants cleared the underwriting process, the premiums offered by the various insurance companies differed greatly. Prices for each applicant fluctuated between hundreds and thousands of dollars per month when coverage was available. Benefits changed between plans as well, with many plans exempting coverage for pre-existing conditions.

Even with insurance, coverage for maternity care, prescriptions, or mental health fell behind the options available through most group plans. Yet, these conditions are some that might facilitate the events mentioned in the 2016 study for entering the individual market.

In the study’s conclusion, the authors found, “Insurance carriers seek to avoid covering people who have pre-existing medical conditions, and when they offer coverage, often impose limitations on the coverage they sell. This can price insurance out of the reach of many consumers in poor health or create significant gaps in coverage that could result in being underinsured.”

Decreased Demand for Clinical Laboratory Tests

Both studies show similarities to many of the concerns cited for the new AHCA. Time Magazine recently published a list of pre-existing conditions under the new proposal. The list bears striking similarity to the list offered in the 2016 KFF study. Speaking with Time, Cynthia Cox, Associate Director at KFF said, “There are plenty of other conditions, even acne or high blood pressure, that could have gotten people denied from some insurers, but accepted and charged a higher premium by other insurers.”

If fewer people can access affordable preventative care, prescriptions, and medical laboratory services, disease diagnosis is delayed. In a 2013 KFF study into the impact a lack of insurance has on healthcare, study authors noted, “Consequently, uninsured patients have increased risk being diagnosed in later stages of diseases, including cancer, and have higher mortality rates than those with insurance.”

Supporters of the proposed AHCA legislation are quick to point out that it does not eliminate protections for people with pre-existing conditions. It simply provides a process for state governments to provide an alternative solution to the federal framework and regulations.

Regardless of the outcome, KFF’s studies make it clear that a decrease in access to insurance means patients skip medical procedures they do not see as essential or cannot afford. This could result in decreased demand for screening and prevention diagnostics, such as those offered by pathology groups and clinical laboratories.

—Jon Stone

Related Information:

An Estimated 52 Million Adults Have Pre-existing Conditions That Would Make Them Uninsurable Pre-Obamacare

50 Health Issues That Count as a Pre-existing Condition

The Uninsured a Primer 2013 – 4: How Does Lack of Insurance Affect Access to Health Care? 

How Accessible Is Individual Health Insurance for Consumers in Less-Than-Perfect Health?

GOP Health Bill Leaves Many ‘Pre-existing Condition’ Protections Up to States

Key Facts About the Uninsured Population

Gaps in Coverage Among People with Pre-Existing Conditions