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How preexisting conditions could derail House Republicans’ health-care bill, explained

Will the GOP health care bill cover people with preexisting conditions? (Video: Peter Stevenson/The Washington Post)
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Health-care policy is incredibly, unbelievably complicated. (Who knew, right?) But if you only learn about one issue, let it be this: whether insurers should charge people with preexisting conditions more because taking care of those people's medical expenses costs more.

It's the perennial sticking point in almost any health-care-reform bill, and House conservatives and President Trump might be at an impasse about it now.

"I want it to be good for sick people. It’s not in its final form right now," Trump told Bloomberg News on Monday of House Republicans' health-care bill. "It will be every bit as good on preexisting conditions as Obamacare."

In an interview with CBS's “Face the Nation” that aired Sunday, Trump promised to “beautifully” protect people who have preexisting medical conditions: “Preexisting conditions are in the bill — and I mandate it.”

Except, what Trump is promising is the opposite of what House Republicans are considering doing.

They are considering a bill that would allow states to allow insurers to charge sick people as much as they want for health insurance. Technically, health insurers couldn't refuse sick people insurance (like they could pre-Obamacare). But practically, sick people probably will be priced out of insurance under this legislation, since insurers could charge whatever they want, said Gary Claxton, a health-care policy expert with the nonpartisan Kaiser Family Foundation.

“What the president says he wants is not what the amendment does,” Claxton said. “[Trump] wants people with preexisting conditions to have insurance. … But they could charge sick people five times the premium, and they won't get any sick people.”

Which means Republicans in Congress and Trump may soon have to make a decision between two fundamentally polar approaches to legislating health coverage: Do you make it cheaper, likely at the expense of sick people? Or do you insure more people, likely making health insurance more expensive?

Here's why more coverage and cheaper coverage are like oil and water: If you want more people to be insured for more benefits — including sick people — then insurance is going to cost more money, because sick people's insurance bills are more expensive.

Before Obamacare, insurance premiums were 20 to 30 percent cheaper. After Obamacare, they got more expensive, but 20 million more people got health insurance, in part because insurance companies had to accept sick people and charge them the same as healthy people.

Over the weekend, Vice President Pence suggested a way around dropping sick people in the name of cheaper coverage for healthy people: high-risk pools. That's where you group together sick people and then give those people some money to offset their much more expensive insurance rates. But, Claxton said, if you let insurers charge as much as they want (like House Republicans are considering), then it'd take a huge subsidy to make these high-risk pools affordable.

Republicans' main grief with Obamacare is that it costs too much. So, the obvious answer to bringing the costs down is to limit benefits. (Right before Republicans' first attempt at revising Obamacare imploded in March, House conservatives were trying to insert an amendment that would slash the essential benefits Obamacare requires insurance cover — things like doctor visits, ambulance rides and maternity care.)

Trump didn't object to undoing those essential benefits. But he doesn't seem to want to cut sick people out of the market — or at least he doesn't want to acknowledge that this bill would essentially cut many of them off.

That makes sense. Requiring that insurance companies cover people is really popular, even today.

And also, cutting these people out of the insurance would significantly lower the insurance rates. “I don't think he wants to be known as the president where 14 million people lost insurance,” Claxton said, referring to an estimate by the nonpartisan Congressional Budget Office of how many people would lose insurance under Republicans' first bill.

To get a health-care bill through the House of Representatives, Trump may have to come to terms with the fact that it will likely cause people to lose health insurance. Or he'll have to find a way to get Republicans on board with a health-care bill that doesn't lower the cost of insurance.