Over the past several months, Democratic candidates have vowed to defend Obamacare’s regulations on pre-existing conditions if they regain control of Congress. They argue these rules protect patients suffering from costly illnesses like cancer, diabetes, and multiple sclerosis, and they say Republicans and other supporters of consumer-driven health care want to heartlessly rip these protections away. However, contrary to these Democratic talking points, Obamacare caused far more problems than it solved for many vulnerable people.
On paper, Obamacare provides Americans suffering from pre-existing conditions with an iron-clad guarantee to health care. The law restricts insurers from rejecting patients based on their health, mandates insurers cover a wide array of medical benefits, and it prohibits them from charging sick patients higher premiums than healthy customers. But these mandates only tell part of the story.
Obamacare’s regulations effectively penalize insurers for providing quality coverage to vulnerable patients. Because the law forbids insurers from charging patients with expensive conditions premiums that are high enough to cover medical expenses, insurers have a gigantic incentive to deny them access to newer and more expensive medications. Over the past two years, economists from Harvard University and the University of Texas at Austin found insurers have responded to Obamacare rules by increasing out-of-pocket fees for medications, eliminating specialists from their networks, and adding others barriers to medical care.
Obamacare also harms people with expensive illnesses by driving young and healthy individuals out of the insurance market. Since the law mandates insurers charge healthy people the same premiums as sick individuals, premiums have increased nearly 140 percent, from $232 in 2013 to $555 in 2018. These premium increases have caused roughly three million people, many of whom are healthy, to drop their insurance, driving premiums for the remaining sick people even higher.
There is a better way to help patients with pre-existing conditions, and the Trump administration is hard at work putting these concrete solutions into action. On October 22, the Department of Health and Human Services released new guidance that empowers states with significantly greater flexibility to overhaul their health insurance markets beyond Obamacare’s failed approach. Under this new system, states will be able to offer individuals and families with an expanded array of affordable insurance options that are currently barred under Obamacare.
For instance, states could use the guidance to allow consumers to purchase plans without some of Obamacare’s expensive and often unnecessary “essential health benefits.” A 2017 analysis by HHS estimates that these reforms would slash premiums by up to 78 percent and expand insurance to over five million people by 2020. This would create a healthier and more stable risk pool for people with pre-existing conditions.
In response to President Donald Trump’s guidance, some Obamacare supporters have argued that insurers will use their new flexibility to price chronically ill patients out of coverage. However, the Trump administration is taking additional steps to safeguard the vulnerable. Since 2017, HHS has been working alongside states to establish publicly funded programs known as “reinsurance” to help insurers pay the medical bills for high-cost patients. Under this initiative, insurers identify patients with pre-existing conditions, and once these patients’ costs reach a certain threshold, the reinsurance program covers the remaining expenses.
Maine first pioneered reinsurance in 2011 to cover sick patients without raising premiums on everyone else in the individual marketplace. Shortly after these changes went into effect, the state’s largest insurer slashed annual premiums by $7,000 for the oldest and sickest enrollees. Most importantly, no one lost their coverage because of the program.
After seeing Maine’s reforms in action, the Trump administration has helped Alaska and Minnesota implement reinsurance programs of their own. In 2019, both states are expecting to see the average premiums in their insurance markets fall by more than 20 percent as a result of these programs. And another five states are also working with the administration to introduce reinsurance to their struggling health insurance markets.
Democrats want voters to think that the only way to protect patients with pre-existing conditions is by protecting Obamacare, a failed program that has unquestionably forced millions of people to lose their health insurance and forced health insurance costs to skyrocket. Fortunately, President Donald Trump has shown there are better solutions, and he is putting them into action.
[Originally Published at The Hill]
Charlie Katebi was a state government relations manager at the Heartland Institute.
