The Affordable Care Act (ACA) has protected the health insurance coverage of millions of people with preexisting health conditions such as asthma, diabetes, and sleep apnea, as well as pregnancy, cancer, and obesity.
Those protections are once again at risk. Last week, the U.S. Department of Justice shifted its stance, telling a federal appeals court that it now believed the entire ACA should be invalidated.
But the Trump administration’s threat reminds us how people with preexisting conditions benefit from the ACA’s protections, and how much they stand to lose if the law is repealed.
Sherry Glied, PhD, a health economist and dean of New York University’s Robert F. Wagner Graduate School of Public Service, said, “If the entire law is struck down, as the court is proposing, we would be back to the situation in 2008, where many protections that are available to people now would go away.”
As many as 20 million people would lose their health insurance if the ACA were completely repealed, according to a recent analysis by the Urban Institute.
There’s no breakdown of how many of these people have one or more preexisting conditions.
But a 2017 government analysis estimated that between 23 and 51 percent of all nonelderly adults have a preexisting condition — or 61 million to 133 million people.
Two things could happen to these people if the ACA were repealed.
“Some of them would not be able to get any coverage, because they would either be denied coverage altogether, or they would be faced with premiums so high that they couldn’t afford them,” said Glied.
The ACA changed how the health insurance industry does business with individuals. After the law went into effect, insurers had to sell insurance to anyone who applied, whether or not they had a preexisting condition.
The Kaiser Family Foundation estimated that 52 million adults under 65 years with a preexisting condition would’ve been denied coverage in 2015 if the ACA weren’t in place.
This would impact people who couldn’t get coverage through an employer, including anyone wanting to start their own business or to retire before their Medicare benefits start.
It would also affect people with low incomes who would no longer qualify for Medicaid if the expansion was reversed.
People with preexisting conditions who get health insurance through an employer wouldn’t be immune from the disruption caused by the repeal of the ACA.
“Someone who has employer-based coverage who has a high-cost illness — such as hemophilia or a heart transplant — might actually max out their coverage at a certain point,” said Dania Palanker, JD, an assistant research professor at the Center on Health Insurance Reforms at Georgetown University’s Health Policy Institute.
The ACA prohibits health plans — even employer-based ones — from putting annual or lifetime limits on received benefits. These protections could go away with an ACA repeal.
The Brookings Institute estimated in 2017 that without the ACA, 109 million more people would have lifetime limits on their coverage.
Many people never hit their lifetime limit. But if people develop chronic or serious conditions that are expensive to treat, such as cancer or hepatitis, they could easily run out of coverage.
”When a baby is born with a congenital defect, sometimes the child will have millions of dollars in care within the first one or two years of life,” said Palanker.
These babies often require long stays in the neonatal intensive care unit, numerous surgeries, and ongoing follow-up.
“If their parents’ employer-based plan has a lifetime maximum of 1 or 2 million dollars, the child could quickly end up without any insurance coverage,” said Palanker.
The ACA also doesn’t allow insurers to charge people with preexisting conditions more, even though these illnesses often require more expensive or ongoing care.
Without this protection in place, insurers could choose to pass the higher costs onto consumers.
“The insurance company is going to price its rates so the company is not really at risk,” said Palanker. “So people’s insurance premiums will go up.”
KFF estimates that millions more people with preexisting conditions may face higher premiums rather than denial of coverage.
Glied wrote on the Commonwealth Fund that most people with preexisting conditions would see an increase in out-of-pocket costs if these conditions were no longer protected by the ACA.
Out-of-pocket costs for people with cancer or diabetes would triple. For arthritis, asthma, and high blood pressure, costs would rise up to 39 percent.
Many people would spend more on other health problems, because the costs for their preexisting conditions would no longer count toward their deductible or out-of-pocket maximum.
These changes will also have effects on people’s health.
Palanker said, “If insurance goes away or if the protections that are keeping cost-sharing down go away, then we will definitely see people making decisions to forgo necessary healthcare.”
They may cut pills in half to make them last longer, avoid doctor’s visits, or have to choose between food for their family and medical care.
“It doesn’t take very long — if people have less money coming in or their healthcare costs go up — to start seeing them having to make those kinds of decisions,” said Palanker.
And without health insurance that covers visits to a primary care doctor, people may turn to hospital emergency departments for more of their medical needs.
“If they show up at the hospital because of an exacerbation of their preexisting condition, they wouldn’t have any coverage,” said Glied. “They would then face risks of going into significant medical debt and bankruptcy.”
States may step in to protect people with preexisting conditions — as many in Congress have done in recent days. But legislation by itself won’t be enough.
Glied said if individual insurance plans have to include people with preexisting conditions, insurers will raise rates to cover the higher medical costs.
As rates go up, healthy people drop out of the individual market. Insurers raise rates again to make up for the loss of that less-expensive group. And so on, until all that’s left are people with the most expensive conditions.
The ACA has several mechanisms in place to prevent this from happening. One is to require everyone to have health insurance, which creates an insurance pool with a mix of healthy and sicker people.
Another is to prohibit insurers from charging people with preexisting conditions higher rates. The ACA also provides subsidies to keep people’s premiums down.
All of these keep the insurance market stable.
If the ACA is repealed, Glied is doubtful that states could pull this off without federal dollars.
“They could pass all sorts of regulations, but that’s not actually going to solve the problem,” said Glied. “We know that states cannot solve this problem without money.”
She added that the ACA goes far beyond protections for people with preexisting conditions.
It touches many parts of the healthcare system, including Medicare and Medicaid, requiring parents’ plans to cover dependents under 26 years old, and calorie labeling in fast-food restaurants.
“The scope of this law is so broad,” said Glied, “that it’s almost unfathomable to imagine that it would all go away.”