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Monday, March 20, 2017

Why the Republican Health Care Bill Won't Fully Protect People with Pre-Existing Conditions

The Republican bill in the House of Representatives to repeal the Affordable Care Act, the American Health Care Act (AHCA), will make it vastly more expensive for anyone who needs health care, particularly those with pre-existing conditions. 

While Republicans claim the AHCA protects people with pre-existing conditions, they will be disproportionally harmed by the bill’s proposals. Specifically:

  • Insurers will be allowed to sell everyone plans with vastly higher deductibles and charge a 30 percent premium surcharge when someone has a gap in coverage. 
  • Combined with less generous financial assistance to help with deductibles and out-of-pocket costs, these changes will increase costs significantly for people with high health care needs.
Millions of people with pre-existing conditions may find coverage unaffordable and be forced to pay out of pocket for care, or go without altogether.

Care for pre-existing conditions can be expensive 

Nearly 133 million individuals, or half of all people in the United States, have at least one pre-existing condition. These individuals often have significant health care needs and require medical care and treatment on a consistent basis to manage their symptoms and maintain optimal health. Because of this, care for these conditions can frequently carry a high price tag. For example: 

The Affordable Care Act (ACA) implemented a number of reforms to help protect people with pre-existing conditions from high health care costs. The AHCA, on the other hand, will make it far more difficult for these individuals to find affordable, comprehensive health insurance and therefore will put their treatment, and health, at risk.  

Plans under the AHCA will cost more and cover less

Under the AHCA, people living with pre-existing conditions will struggle with vastly higher deductibles and less comprehensive plans. The average marketplace plan could easily have a deductible upwards of $7,000, meaning that most, if not all, care would have to be paid for out of pocket before insurance kicks in. 

For low- and moderate-income people receiving financial help under the ACA to pay for out-of-pocket costs, this change could be potentially catastrophic. These individuals could be forced to make tough decisions between paying for care and paying for their rent.

To illustrate the impact of this change, consider that an individual making $17,000 a year would see their current deductible (with cost-sharing assistance) of $125 under the ACA jump to $7,000 under the AHCA, a 5000 percent increase. 

For someone living with diabetes, for example, this would mean that they would be on the hook for nearly all of their yearly treatment costs ($7,900) without any help from their insurance.  

Continuous coverage requirement would make premiums unaffordable 

In addition to significantly higher out-of-pocket costs, those with pre-existing conditions may also find their premiums unaffordable if for any reason they are unable to maintain continuous coverage throughout the year. The AHCA replaces the ACA’s individual mandate with a harmful continuous coverage requirement where consumers are charged a 30 percent premium surcharge when they try to enroll after a lapse in coverage. 

It is generally never an individual’s first choice to forego coverage – most people lose coverage simply because they can’t afford it. This is even more challenging for people who face serious or debilitating illnesses and are unable to work. Yet, lapses in coverage are common: Nearly 40 million people had a gap in coverage in 2016. 

Nearly 70 percent of those individuals had a gap long enough to subject them to a premium surcharge under the AHCA. Charging these individuals 30 percent more for coverage could put millions of people, including millions with pre-existing conditions, out of coverage completely. 

Funding for states to offset increased costs is inadequate 

Lastly, while the AHCA does provide some funding for states that could be used to offset the loss of cost-sharing assistance or provide additional financial help to purchase coverage, the amount allocated is woefully inadequate to protect people with pre-existing conditions from increased health care costs. For instance, states can draw down funding for a variety of purposes that, taken together, cost more than double the amount allocated in the bill.

States could, for example, use the funds to help their residents with cost-sharing – filling the hole created by the bill’s repeal of the cost-sharing subsidies. However, the fund only allocates $10 billion dollars for a job that the nonpartisan Congressional Budget Office (CBO) has estimated will cost $13 billion. Even if every state used their funds to help individuals afford their out-of-pocket costs, it wouldn’t be nearly enough to provide the same level of financial protection that people have currently under the ACA. 

All told, the AHCA could put affordable coverage and care out of reach for millions of people with pre-existing conditions. Republicans in the House like to say that the AHCA protects people with pre-existing conditions, but these are merely empty promises. 

Learn more about our campaign to defend the progress we’ve made under the ACA by visiting our Protect Our Care Initiative page.

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