Don’t retreat on pre-existing conditions

When Congress and the Obama administration sought to reform the health-care system in 2009, they focused on insuring more people, lowering the cost of care and raising the quality.

The Trump administration appears to be aiming at a different target: reducing the cost of insurance for healthy people. That may sound like a fine goal, but the administration is going about it the wrong way — by returning us to the days when sick people had to pay exorbitant premiums, if they could get coverage at all.

That's the upshot of the proposal the administration recently put in front of recalcitrant House conservatives after they blocked the GOP leadership's proposal to "repeal and replace" Obamacare, arguing that it didn't remove enough of the law's insurance regulations. Those regulations, members of the arch-conservative Freedom Caucus complained, force healthy people to pick up too much of the costs imposed by the ill and the injured.

They're not inventing the complaint out of whole cloth. Obamacare (also known as the Affordable Care Act) sought to insure millions of uninsured Americans by providing the same protections in the nongroup market that Congress extended to employer plans in 1996: Insurers couldn't deny any applicant or charge higher premiums for those with pre-existing conditions. They also must cover 10 "essential health benefits," such as hospitalization and maternity care, commonly covered in employer plans.

Those changes aimed to spread the risk and cost of insurance broadly across each state. But for a number of reasons, insurers in some regions racked up big losses, leading to large premium increases. Although the vast majority of the people shopping at state insurance exchanges received subsidies that dulled or eliminated the pain of premium increases, millions of others who bought individual policies in and out of the exchanges did not. Those are the people hit hardest by the premium increase, especially in states like Florida that took a hands-off approach to insurers' rates and policy offerings.

There are plenty of things Congress and the states could do to try help those consumers, including offering more tax breaks, creating reinsurance funds to mitigate insurers' risks and working harder to persuade younger, healthier people to buy insurance. What the House GOP leadership proposed, however, was to let insurers sell plans that covered a smaller fraction of medical bills. According to the Congressional Budget Office, that would cause premiums to go up more than the current approach for the first few years, but the increases would eventually be lower by comparison.

After the Freedom Caucus balked, Vice President Mike Pence proposed letting states waive the ACA provisions that bar insurers from denying coverage or charging more to people with pre-existing conditions, and one requiring insurers to cover 10 essential health benefits.

In states that waive those rules, insurers would likely offer lower-cost policies to attract the sort of people insurers like to cover: the ones who don't need care. Residents there would face the same obstacles they did prior to the ACA, when insurers sold exemption-laden policies that shifted the risk of hefty medical bills onto their customers. They'd also be free to deny coverage to people with expensive chronic conditions or risky lines of work.

Supporters of this approach argue that states could institute "high-risk pools" to cover anyone shunned by private insurers. But many states tried high-risk pools before the ACA, and they proved so costly that states ended up denying coverage to some applicants and for some conditions. In other words, the pools provided little help to those who needed it most.

Pence's talks didn't bear fruit, so Congress broke for spring recess with the matter still up in the air. While lawmakers are back home, Americans with pre-existing conditions who couldn't get insurance before the ACA need to tell their representatives not to sacrifice their coverage to "solve" the problem of high premiums.