At his CNN town hall yesterday, Paul Ryan met a man named Jeff Jeans, a lifelong Republican and small business owner who not long ago got a cancer diagnosis. He didn’t have insurance at the time and was told that without treatment he’d have only six weeks to live.
“Thanks to the Affordable Care Act, I’m standing here today alive,” he said. “I want to thank President Obama from the bottom of my heart, because I would be dead if it weren’t for him.”
Let’s not mince words: If Paul Ryan and the rest of the Republicans in Congress get their way, people like Jeff Jeans will die.
That sounds like hyperbole, like unnecessarily inflammatory rhetoric. But it’s the truth. These are literally life-and-death questions Congress is deciding.
There are a lot of reasons why repealing the ACA is going to be a disaster. But for now I want to focus on just one: what’s going to happen to the estimated 52 million Americans who have pre-existing conditions, like Jeff Jeans?
To begin, let’s remember what it was like before the ACA was passed. When you applied for insurance, you had to give a detailed accounting of every major medical procedure you’d ever had, every serious condition you’d ever had, every time you had sought treatment for anything for years prior. The insurer would comb over your application to see if there was any grounds on which they could reject you. That didn’t just apply to people with chronic conditions like diabetes or a major illness like cancer. In the bad old days, insurers could deny you coverage for anything. Tore some cartilage in your knee on the basketball court a few years ago? Denied. Had sinus problems? Denied. Carpal tunnel? Denied. If you were lucky, they’d cover you but just refuse to pay for anything remotely related to your old condition or that particular body part.
And when you did get sick, they’d sometimes undertake a “recission,” in which they went back through your records to see if there was any excuse they could use to cancel your policy now that you were going to cost them money. Check out this account from journalist Xeni Jardin, who was diagnosed with breast cancer before the ACA took effect. During one chemotherapy session, someone from the billing department pulled her aside and told her, “Your insurance company has opened a fraud investigation because they believe you had cancer as a pre-existing condition.” Imagine dealing with that while you’re fighting for your life.
Now here’s how getting insurance works today, with the Affordable Care Act in effect, if you have a pre-existing condition. See if you can follow along, because it’s pretty complicated:
You buy coverage. The insurer doesn’t ask you about your medical history. It’s covered. That’s all.
Here’s a list of some things that will return once they repeal the ACA:
- The application process for insurance will become much more cumbersome and onerous.
- Insurers will be able to charge people with pre-existing conditions higher premiums.
- Insurers will be able to impose yearly and lifetime limits on benefits, which affects people who have serious illnesses or accidents. This could apply to those with good employer-provided coverage as well as those who buy on the individual market.
- “Job lock,” in which people are afraid to leave their job and do something like start a new business for fear of losing the insurance they have, will return.
- Insurers will be able to charge women higher premiums than men, because they consider being a woman to be a pre-existing condition.
- Insurers will be able to rescind coverage when you get sick.
All of that was eliminated by the ACA. It’s possible that in their replacement plan Republicans might take steps to retain some of what the ACA did in these areas, but right now we just don’t know.
So let’s look at what we do know. Though their plans are still forming, there are some common features to what Republicans have suggested. Instead of the ACA’s simple requirement that insurers have to accept everyone, they’d substitute a complex, multi-stage process with the explicit goal of separating off the more expensive patients from the rest of the population. And the security we all now enjoy would be gone.
Let’s think about this in terms of Jeff Jeans. Under Paul Ryan’s plan and another one proposed by Tom Price, who is Donald Trump’s choice as secretary of health and human services, Jeff would have to maintain “continuous coverage” to be guaranteed insurance. As long as he doesn’t lapse, insurers would have to offer him coverage at the same rates as everyone else.
But what if he does? What if his business has a temporary downturn and he can’t afford it for a while? That’s when things get tricky. Depending on what Republicans finally decide on, Jeff would either be able to get coverage from a private company but they’d be able to charge him much higher premiums, or he’d have to go to a “high-risk pool.” And then he’ll really be in trouble.
As Ryan said at his town hall, “We believe that state high-risk pools are a smarter way of guaranteeing coverage for people with pre-existing conditions.” This is lunacy.
Ask any health policy expert about high-risk pools, and they’ll tell you that they’re absolutely the worst way to guarantee coverage for people with pre-existing conditions. Before the ACA, many states had them as a backstop for their most vulnerable patients. As this Kaiser Family Foundation report explains, they were characterized by high premiums, waiting lists to get on, lifetime and annual limits, temporary exclusions of the very conditions that made people seek them out (you often couldn’t get coverage for your condition in the first 6 or 12 months you were on the plan), and high deductibles.
The states put all those restrictions on because otherwise, the pools would have been impossibly expensive to run. So what patients were left with was bad yet overpriced insurance.
The reason why high-risk pools offer such poor coverage at such high cost is simple: they take the most expensive patients and put them all together. It violates the fundamental principle of insurance, which is to spread risk as widely as possible. You want your insurance pool to be broad, so that the more expensive patients are offset by those who are less expensive to insure.
Now here’s the final piece of this puzzle. In Paul Ryan’s plan, he suggests funding these high-risk pools with $2.5 billion per year. Tom Price’s plan is even stingier, at $1 billion a year. Those numbers are so low that it almost seems like a joke. This Commonwealth Fund study estimated that a national high-risk pool would require $178 billion a year to fund.
So, to wrap this up: If you’re one of the 52 million Americans with a pre-existing condition, right now, under the Affordable Care Act, you can get insurance, no questions asked. If the Republicans get their way, you can get insurance if you don’t ever go without it, but if you lapse, you’ll be charged more and you may get pushed into a high-risk pool where you’ll get charged a lot more for inadequate coverage. If you can afford it, good for you. If you can’t, you’re screwed. There will be people who can’t afford that coverage, who’ll go without it, and who won’t be able to get care at the moment they most desperately need it. We know, because there were so many who suffered that fate before the ACA was passed.
That’s the “better” system Republicans want to give you.