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Repeal & Replace Watch

KHN On Call: How Retooled Health Law Might Treat Those With A History Of Illness

Many people are worried about how potential changes to the federal health law might affect them. But few are as concerned as those with preexisting health conditions.

The Affordable Care Act made it illegal for insurers to deny or charge people more money because of a history of illness. That’s a pretty big deal because an estimated 52 million American adults have such conditions — ranging from serious ailments like diabetes and HIV to more minor maladies like acne or seasonal allergies. Before the ACA, people with these conditions were often denied insurance. If they were offered insurance, it could cost more or didn’t include coverage of their condition.

Republicans insist they want to continue to allow people with preexisting conditions to maintain their coverage in any replacement for the health law, and the current draft of the American Health Care Act retains that provision.

“We are protecting those patients living with preexisting conditions,” said House Energy and Commerce Committee Chairman Greg Walden (R-Ore.) at the start of his committee’s consideration of the bill March 8.

But it is not yet clear how they will be able to do it, which leads to our listener question this week.

Rich Renner of Collingswood, N.J., asks, if the law is repealedand whatever replaces it does not include a preexisting conditions provision, are there any programs in place at the state level that would step in to help?”

In a word, no. But it’s complicated.

First, a little background. People who get their insurance on the job have been protected against discrimination for preexisting conditions since 1996, when Congress passed the Health Insurance Portability and Accountability Act (HIPAA). They can go from one job-based policy to another job-based policy, or, in some cases, to an individual policy, as long as they remain covered without a break of more than 63 days.

But insurance companies in the individual market were afraid that if sick people could buy insurance, it would drive costs up, and healthy people wouldn’t bother to buy coverage or would be priced out. That could lead to an insurance “death spiral,” where there are no healthy people left to help spread out the costs of the sick.

The compromise in the ACA was to require healthy people to have insurance or else pay a fine. That wasn’t popular, and it’s the number one item Republicans say they want to repeal.

In the bill introduced by Republican leaders, however, the requirement for insurers to sell to those with preexisting conditions remains intact. That’s not because they don’t want to repeal it, but because they can’t under the budget rules that govern the bill.

But that doesn’t guarantee people with preexisting conditions will still be able to get insurance.

The GOP bill says that people who experience a gap in coverage will pay a fine to the insurance company of 30 percent higher premiums for a year.

But analysts say that could actually deter healthy people from signing up until they need care.

And if that happens and there are still too many sick people signing up, more insurers will stop selling coverage until there’s nothing left to buy.

So in the end you could have a guarantee but no way to buy coverage. Obviously there’s much more to be worked out here.

Got more questions about what’s happening to the ACA? I’ll be back next week with even more answers. Just tweet @MorningEdition using the hashtag #ACAchat.

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