One of the most contentious healthcare-reform issues centers around pre-existing conditions. Obamacare guaranteed coverage for people with a pre-existing condition, and critics of Trumpcare suggest that plans to repeal and replace Obamacare would eliminate those guarantees.
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To understand how this could impact health insurance, it's important to understand what a pre-existing condition is, what the rules were for pre-existing conditions before Obamacare, what changes occurred with Obamacare, and what modifications Trumpcare would make.
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What is a pre-existing condition?
A pre-existing condition is any health condition you have prior to the date insurance coverage takes effect. Some people are born with pre-existing conditions, while others develop health issues later in their lives.
Examples of conditions that could be considered pre-existing if diagnosed before the effective date of a health insurance policy include, but are not limited to: Alzheimer's, anemia, asthma, bipolar disorder, cancer, cerebral palsy, chronic obstructive pulmonary disease (COPD), cystic fibrosis, depression, diabetes, dialysis-dependent kidney disease, hepatitis, heart conditions of various types, menstrual irregularities, multiple sclerosis, obesity, Parkinson's disease, pregnancy, sleep apnea, and care related to transplanted organs.
There are more than 52 million Americans with declinable pre-existing conditions, according to the Kaiser Family Foundation, which defines a "declinable" pre-existing condition as a condition that would have resulted in a denial of individual insurance coverage before the passage of Obamacare. More than a quarter of Americans under Medicare age have a condition that could make obtaining insurance coverage impossible without protections for pre-existing conditions.
How were pre-existing conditions treated before Obamacare?
Before Obamacare was signed into law, insurers that sold policies on the individual market -- as opposed to those that sold group policies to employers -- used a medical underwriting process when issuing policies. Insurers would require applicants to provide a complete medical history and would use past health status to make a determination on coverage.
Some applicants with serious and costly conditions would be denied insurance coverage entirely. Others would face very high premiums or might be offered coverage but with a rider -- a clause specifying the insurer would not pay for any care associated with a specific health issue.
For those denied policies or priced out of policies, the majority of states had high-risk pools to provide coverage for individuals whose health issues precluded the purchase of individual insurance. However, these pools were often costly to join, provided limited benefits, and made enrollment difficult for those who needed help.
What protections did Obamacare provide for people with pre-existing conditions?
Obamacare required insurers to provide coverage to all applicants who enrolled during the open enrollment period. Obamacare also prevented policies from being priced based on health status. Instead, insurers were mandated to use adjusted community ratings. Community ratings mean insurers must charge the same premiums for everyone within the same age group in the same community, regardless of health status.
More than 2.2 million people with pre-existing conditions now have coverage through the individual insurance market. Critics of Obamacare argue that a disproportionate number of people who are high consumers of medical services signed up to obtain this coverage, driving up premiums for younger and healthier people who were forced to buy policies on the exchange because they have no access to employer-based coverage.
How would Trumpcare change coverage for pre-existing conditions?
Trumpcare, or the American Health Care Act, has passed the House of Representatives, but the U.S. Senate is revising and rewriting the healthcare reform plan; substantial changes are expected. However, Trumpcare was able to win votes from the House Freedom Caucus -- a group of more than 30 Republican representatives whose votes are necessary to pass the bill -- only because of the MacArthur-Meadows Amendment.
The Amendment allows states to request a waiver from certain Obamacare provisions, including community ratings. States requesting a waiver would remove the requirement that insurers use community ratings to price insurance policies in all circumstances. While Trumpcare mandates that insurers issue policies to individuals with pre-existing conditions, modifying the community-ratings requirements would mean insurers could charge much higher premiums for people with medical needs.
Rep. Mark Meadows of North Carolina, one of the Amendment's namesakes, is working with the Senate as it revises Trumpcare; while he acknowledges the bill may move left, most current proposals involve some type of modification to Obamacare's pre-existing condition rules.
Lawmakers in several states -- including Wisconsin and Florida -- have expressed preliminary support for waivers, although Gov. Scott Walker of Wisconsin appeared to walk back his plans after public outcry and suggest that Wisconsin would keep coverage for pre-existing conditions. While it may prove politically perilous for state lawmakers to take away health benefits granted through Obamacare, Gov. Matt Bevin of Kentucky shuttered successful state exchanges after his election and is working toward rolling back Medicaid expansions, proving it is not impossible for governors to cut back on coverage for state residents.
What can you do to protect your coverage if you have a pre-existing condition?
If you have a pre-existing condition, one option is to find coverage through an employer, as group policies sold to employers typically do not exclude coverage based on health issues.
Trumpcare also allocates $8 billion for high-risk pools, which would provide coverage to individuals with pre-existing conditions. However, the AARP warns that premiums for high-risk pools could be as much as $25,700, putting these policies out of reach financially for most families.
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