House Bill Targets Pre-Existing Conditions in Multiple Ways
For those with pre-existing medical conditions, the House-passed health bill became notorious for a last-minute addition that would let insurers once again charge them higher premiums in the individual market based on their health status. But the focus on this single provision distracts from a troubling fact: even without it, the bill would threaten health care for those with pre-existing conditions in four broader ways.
#1: The bill would cap and cut federal funding for virtually all of Medicaid by imposing a per capita cap or letting states convert Medicaid into a block grant.
A per capita cap would set annual limits on federal funding per beneficiary that would grow more slowly than actual health care costs. A block grant would cap the amount of overall federal Medicaid funding the state could receive. Either way, states would receive significantly less federal funding compared to current law, under which the federal government pays a fixed share of state Medicaid costs, and the funding cuts would grow deeper each year.
Faced with large cuts in federal funding, states would have no choice but to sharply cut their programs. Consequently, tens of millions of people with pre-existing conditions – including millions of children with disabilities and special health care needs – would face the threat of Medicaid cuts. They could lose coverage entirely or go without needed care as states scaled back covered benefits and payments to medical providers.
Home- and community-based services, an optional Medicaid benefit that most states already limit based on available funds, would be at particular risk. These services, which include nursing and home health care and help with chores, meals, transportation, and other services, let seniors and other low-income people with serious health problems remain in their homes instead of having to go to a nursing home.
#2: The federal government wouldn’t provide any more enhanced funding after 2019 for Medicaid enrollees who were enrolled because their states took the option, under the Affordable Care Act (ACA), to expand their Medicaid programs.
That would force states to pay three to five times more for the ACA’s Medicaid expansion. Most or all of the 31 states and Washington, D.C. that have adopted it would have no choice but to drop it because they could no longer afford it.
The Medicaid expansion now covers 11 million people, including many who have pre-existing conditions. For example, almost 30 percent of those benefitting from the Medicaid expansion have a mental illness or substance use disorder. By effectively ending the Medicaid expansion starting in 2020, the House bill would leave millions of low-income people with pre-existing conditions without coverage.
#3: The bill would let insurers charge older people — many of whom have pre-existing conditions —at least five times more to buy coverage compared to younger consumers, while also slashing the subsidies that help them afford insurance.
For example, a 60-year-old woman with $22,000 of annual income who faced the national average benchmark premium would pay $8,200 more in premiums after accounting for federal tax credits than she does now. The Congressional Budget Office projects that uninsured rates for people age 50-64 would double due to the House bill. Some 84 percent of people age 55-64 have pre-existing health conditions.
#4: The bill would eliminate a broad range of consumer protections that the ACA established in the individual market, threatening access to health care and coverage for those with pre-existing conditions.
Plans would no longer need to offer a comprehensive set of benefits and could exclude even core benefits such as maternity services and mental health care. Nor would they have to limit the amount that people with expensive health care must pay out-of-pocket for deductibles and other cost-sharing each year. Insurers could again place annual and lifetime limits not only on individual and small-group plans but also on coverage that people get from large employers, leaving millions with costly pre-existing conditions to once again worry about exhausting their benefits.
All told, then, the House bill would bring back the highly-flawed, pre-ACA individual insurance market that made it impossible for millions with pre-existing conditions to get adequate, affordable health coverage. Additionally, it would threaten the coverage of millions of Medicaid recipients with pre-existing conditions.
That’s not a health care system that should make us proud.
Sarah Lueck is a senior policy analyst at the Center on Budget and Policy Priorities.