It’s true that the Senate outline requires insurers to offer coverage to people with preexisting conditions. And unlike the bill the House passed last month, the Senate outline requires insurers to charge them the same premium as everyone else. But the Senate outline — like the House bill — still allows states to waive coverage of essential health benefits.
Under the ACA, these benefits fall into 10 categories, such as hospitalization and emergency care. Before the ACA became law in 2010, many plans did not provide coverage for dental and vision care for children, maternity care, substance use disorder treatment (such as opioid addiction treatment), mental-health care or prescription drugs. Senate Republicans would let states permit insurers to decide not to cover those services again.
By allowing those waivers, the Senate outline also allows waivers of the ACA’s ban on lifetime and annual limits on coverage. The two protections are linked: The ban on limits applies only with respect to essential health benefits. If states restrict what is considered an essential health benefit, insurers can then impose lifetime and annual caps on all other types of coverage.
As the nonpartisan Congressional Budget Office recently confirmed, waivers of essential health benefits and the ban on lifetime and annual limits would increase patients’ out-of-pocket costs by thousands of dollars. These waivers would be especially devastating for people with cancer or other diseases that require expensive drugs.
What’s more, the Senate’s design would set in motion a downward spiral in benefits offered by insurers. If insurers couldn’t mark up premiums for people with preexisting conditions, the only tool they would have left to manage risk is their benefit packages. Insurers would be able to screen out sick people by excluding benefits they need — and would race to avoid being stuck with the sickest patients.
The CBO projected that about half of the population resides in states that would waive essential health benefits. About 19 million people are enrolled in the individual market nationwide, which means that under the CBO’s projection, about half, or 9.6 million, would live in waiver states. Since 55 percent of enrollees in the individual market have a preexisting condition, about 5.3 million people with preexisting conditions would live in waiver states and have their protections severely eroded.
Many others with preexisting conditions would be forced to pay thousands of dollars more in premiums just because of their old age. The Senate outline — just like the House bill — allows insurers to charge older enrollees five times more than they charge younger enrollees. The CBO estimated that a 64-year-old making $27,000 would pay $14,400 more in premiums than under the ACA in 2026. Although the Senate bill is expected to boost tax credits for older enrollees to moderate this “age tax,” the money Republicans have set aside for this purpose would be woefully inadequate; older enrollees would still pay thousands of dollars more.
How many older enrollees with preexisting conditions would be affected? About 5.1 million people ages 55 to 64 are enrolled in the individual market. Since 84 percent of enrollees in this age group have a preexisting condition, 4.3 million older enrollees with preexisting conditions would face thousands of dollars in additional costs.
But the Senate bill’s biggest blow to people with preexisting conditions is its cuts to the Medicaid program. The House bill repeals extra funding for Medicaid expansion in 2020; the Senate outline delays that date by a few years. But this delay would not change the result in 2026 — when the CBO estimates the impact on coverage. About 14 million people enrolled in Medicaid would become uninsured.
About 48 percent of people with income in the Medicaid range have a preexisting condition. This means that 6.7 million Medicaid enrollees have preexisting conditions and would become uninsured. An additional 900,000 elderly would lose their Medicaid benefits as a result of the bill’s cap on Medicaid funding — nearly all of whom have preexisting conditions. Although they would still be eligible for Medicare, their out-of-pocket costs would increase and they would no longer have coverage for nursing home care or home- and community-based services.
Vice President Pence recently promised: “We’re going to make sure that every person with preexisting conditions has access to the coverage and the care that they need, no exceptions.” In fact, there would be millions of exceptions — and for years to come, Republicans will have to deal with the political repercussions of breaking such a big promise.