Studies estimate impact of changes in health insurance
The good old days of health insurance pricing could return, depending on what part of the country people live in.
Before the Affordable Care Act, it was difficult to buy an individual health insurance policy for those who were pregnant, had sleep apnea or diabetes, among other problems. These were reasons that insurers used to automatically deny coverage to consumers in 45 states and the District of Columbia before 2014 when the ACA barred exclusions based on medical history.
Heart disease, cancer and alcohol abuse were other reasons that resulted in the denial of individual health care coverage, according to a list of so-called declinable medical conditions that insurers once used as a guide.
The American Health Care Act, which was passed by the U.S. House of Representatives on May 4, but still faces review in the U.S. Senate, would give states the option of setting insurance premiums according to a person’s medical history. Two new studies by Menlo, Calif.-based Kaiser Family Foundation shed light on the number of Americans who could be affected by higher premiums resulting from the change.
One study estimated that 27 percent of Americans under age 65 would likely have been denied insurance before 2014 because of health conditions — a group that includes 2.04 million Pennsylvanians or 27 percent. West Virginia led the nation in the share of adults under age 65 with declinable conditions at 36 percent.
Morewomen than men have medical conditions that would’ve disqualified them for individual coverage before the ACA — 29.4 million women versus 22.8 million men, which isn’t entirely explained by pregnancy, Kaiser found.
Kaiser estimated 27.4 million
people under age 65 had a gap in health insurance of several months in 2015, leaving them open to steeply higher premiums in states that adopt the AHCA waiver. Insurers could apply the rating waiver to people who have had a gap in their health insurance lasting 63 days in the previous year by adding a 30 percent penalty to their premium, a move meant to create an incentive to stay insured.
Supporters say the changes will result in lower premiums by giving insurance carriers greater flexibility in constructing plans. But some people with individual coverage worry about the proposed changes, including Rachael Rice, a self-employed 28-year-old Mount Washington consultant for people who have dementia.
“It really puts everybody in jeopardy,” she said about the Republican bill now being considered by the Senate.
The Kaiser study notes that the AHCA’s premium tax credits would average 36 percent lower than those available to current government insurance marketplace enrollees.
Kaiser’s projections were based on the most recent National Health Interview Survey and the Behavioral Risk Factor Surveillance System, which can be used to estimate various health conditions.
The study was also based on underwriting manuals that were used in the individual market prior to the passage of the ACA.
States that waive community-based rating for health insurance premiums would be required to set up high-risk pools or make reinsurance arrangements, which the bill backs with $100 billion for such aids, including costsharing subsidies for consumers.