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Without ACA Guarantees, 52 Million Adults Could Have Trouble Buying Individual Plans

More than 1 in 4 adults younger than 65 live with conditions that private insurers could have declined to cover in some policies prior to the Affordable Care Act, according to an analysis by the Kaiser Family Foundation.

The researchers noted that a large share of those individuals likely get their insurance through their employers, which does not take into consideration prior health issues. But if the health law were repealed and those people lost their health insurance for any reason, they could face problems.

Southern states carried the highest percentages of adults at risk of being shut out by insurers.

The analysis found that 52 million nonelderly adults faced the possibility of being denied coverage due to a preexisting condition if they were purchasing a policy on the individual market under the common rules used before the health law. In the individual market, consumers buy their own insurance. It serves people who cannot access employer-based insurance or public health coverage, such as Medicaid.

A third of the adult population in Alabama, Kentucky and West Virginia fall in that category.

The study highlights the risk that some people might face if Republicans go forward with their pledge to repeal the health law and don’t have adequate safeguards against basing insurance on preexisting conditions.

The individual market is quite small — about 8 percent of adults — but the number of people affected by it is likely much higher, researchers note, because people churn in and out of that market frequently, as they change jobs or go through a divorce, for example.

The federal health law’s prohibition on denying coverage based on medical history is quite popular. But to help maintain a healthy insurance pool that could offset insurers’ costs for the care of sick customers, the law mandates that most people buy insurance or pay a penalty. It is that individual mandate that has generated strong objections from critics of the law.

Researchers analyzed data from two surveys conducted in 2015 by the federal Centers for Disease Control and Prevention. The age, health status and conditions participants reported in the surveys were key indicators in identifying this population.

Cynthia Cox, associate director of health reform and private insurance at KFF and one of the authors of the study, said as Congress considers overhauling the health law, lawmakers need to consider those people who churn in and out of the individual market. (KHN is an editorially independent program of the foundation.)

“I think what the study shows is that the details of a repeal and replace act matter not only for the people that are immediately affected,” she said, “but for the people that might need this coverage at some point in their lives.”

Prior to the ACA, medical underwriting was standard practice in 45 states and the District of Columbia, the analysis said. Prospective enrollees typically filled out a survey regarding their medical history that included questions about pregnancy status, medications and lab results. Applications also included an authorization clause that allowed insurers to access all medical records.

Insurance companies could deny coverage based on preexisting conditions such as pregnancy, cancer and diabetes the study reported. Additionally, these entities could also reduce coverage by cutting out certain medications such as cancer fighting drugs and antipsychotic medications. Individuals with certain occupations such as firefighters, taxi cab drivers and air traffic controllers faced an uphill battle to secure coverage from some insurers.

Sabrina Corlette, research professor at Georgetown University Center on Health Insurance Reforms, said the individual mandate has not provided enough incentives so far to guarantee a robust health pool, but she urged officials to give it more time.

“I would argue that before we throw the baby out with the bathwater, we should give the individual mandate a chance to work,” she said.

However, Robert Laszewski, a health care industry consultant and president of Health Policy and Strategy Associates, said the individual mandate has been proven to not work. He suggested Republicans look at other options, including a penalty similar to Medicare Part B, where enrollees pay a more if they choose to enroll after they first become eligible.

Regardless of the future health policy in place, Laszewski said it is imperative that individuals living with illnesses have access to health insurance.

“You can’t have a workable system without covering a preexisting condition,” Laszewski said.

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