If You Have a Preexisting Condition, the GOP Health Care Bill Is Even Worse Than You Thought

Your continuous coverage won’t save you.

Rep. Jason Chaffetz (R-Utah), moments before voting to undo Obamacare's preexisting condition protectionsBill Clark/ZUMA

Fight disinformation: Sign up for the free Mother Jones Daily newsletter and follow the news that matters.


When Republican lawmakers face criticism over their plan to allow states to dismantle protections for people with preexisting conditions, they have a pretty standard response. Their Obamacare repeal bill, they insist, would only allow insurers to jack up prices on sick people if those people haven’t maintained continuous health coverage. “For individuals with preexisting conditions, once you are in the system, every proposal that I’ve heard so far says you stay in the system,” Sen. Mike Rounds (R-S.D.) told NPR Thursday. “And if you do have a serious illness, you can’t run out of coverage.”

But we now know that isn’t really accurate. As Mother Jones‘ Kevin Drum points out, Wednesday’s Congressional Budget Office analysis of the bill suggests that anyone with a preexisting medical condition—even people who already have health insurance—could face steep premium hikes.

“The nongroup markets in those states would become unstable for people with higher-than-average expected health care costs.”

Part of what Republicans are saying is technically true: The bill does, in fact, bar insurance companies from singling out individuals for price hikes if they have maintained continuous coverage. But the CBO notes that insurers would have—and likely would use—a workaround that would effectively jack up rates on every sick person they cover in the non-group market.

The exact mechanism is a bit complicated. In essence, insurance companies would entice healthy people out of the community-rated market—which mandates that everyone pay the same rate, with no differences based on health status—by offering plans with cheaper premiums. Those new plans would be subject to underwriting, which means that they’d likely be unaffordable for people with preexisting conditions. Sick people would remain in the community-rate plan, where prices would skyrocket. That, in turn, would drive more healthy folks away from the community-rated plans, creating a downward spiral.

The Brookings Institution’s Matthew Fiedler flagged this possibility before the CBO report came out. “With healthy enrollees opting out of the community-rated pool,” Fiedler wrote, “community-rated premiums would need to be extremely high, forcing sicker individuals—including those with continuous coverage—to choose between paying the extremely high community-rated premium or being underwritten themselves. Either way, people with serious health conditions would face prohibitively high premiums.”

The CBO is surprisingly frank about the effects the GOP bill would have on people preexisting conditions. The report predicts that about 15 percent of Americans will live in a state that obtains a waiver to end the ban against price discrimination. According to the report, “The nongroup markets in those states would become unstable for people with higher-than-average expected health care costs.” Premiums would become far more expensive, and possibly so expensive that people with preexisting conditions would essentially be excluded entirely from the market.

According to the Kaiser Family Foundation, about 27 percent of people under the age of 65 have serious enough preexisting conditions that they would have been denied coverage prior to Obamacare. Those people would be left struggling to pay higher premiums in the states that opt out of the Obamacare protections. Republicans have promised government-funded high-risk pools as a fallback option, but they have wildly exaggerated the amount of money that the bill would provide for these pools. Just $8 billion over 5 years is earmarked for high-risk pools (with no future money promised). According to the CBO, that amount “would not be sufficient to substantially reduce the large increases in premiums for high-cost enrollees.”

AN IMPORTANT UPDATE

We’re falling behind our online fundraising goals and we can’t sustain coming up short on donations month after month. Perhaps you’ve heard? It is impossibly hard in the news business right now, with layoffs intensifying and fancy new startups and funding going kaput.

The crisis facing journalism and democracy isn’t going away anytime soon. And neither is Mother Jones, our readers, or our unique way of doing in-depth reporting that exists to bring about change.

Which is exactly why, despite the challenges we face, we just took a big gulp and joined forces with the Center for Investigative Reporting, a team of ace journalists who create the amazing podcast and public radio show Reveal.

If you can part with even just a few bucks, please help us pick up the pace of donations. We simply can’t afford to keep falling behind on our fundraising targets month after month.

Editor-in-Chief Clara Jeffery said it well to our team recently, and that team 100 percent includes readers like you who make it all possible: “This is a year to prove that we can pull off this merger, grow our audiences and impact, attract more funding and keep growing. More broadly, it’s a year when the very future of both journalism and democracy is on the line. We have to go for every important story, every reader/listener/viewer, and leave it all on the field. I’m very proud of all the hard work that’s gotten us to this moment, and confident that we can meet it.”

Let’s do this. If you can right now, please support Mother Jones and investigative journalism with an urgently needed donation today.

payment methods

AN IMPORTANT UPDATE

We’re falling behind our online fundraising goals and we can’t sustain coming up short on donations month after month. Perhaps you’ve heard? It is impossibly hard in the news business right now, with layoffs intensifying and fancy new startups and funding going kaput.

The crisis facing journalism and democracy isn’t going away anytime soon. And neither is Mother Jones, our readers, or our unique way of doing in-depth reporting that exists to bring about change.

Which is exactly why, despite the challenges we face, we just took a big gulp and joined forces with the Center for Investigative Reporting, a team of ace journalists who create the amazing podcast and public radio show Reveal.

If you can part with even just a few bucks, please help us pick up the pace of donations. We simply can’t afford to keep falling behind on our fundraising targets month after month.

Editor-in-Chief Clara Jeffery said it well to our team recently, and that team 100 percent includes readers like you who make it all possible: “This is a year to prove that we can pull off this merger, grow our audiences and impact, attract more funding and keep growing. More broadly, it’s a year when the very future of both journalism and democracy is on the line. We have to go for every important story, every reader/listener/viewer, and leave it all on the field. I’m very proud of all the hard work that’s gotten us to this moment, and confident that we can meet it.”

Let’s do this. If you can right now, please support Mother Jones and investigative journalism with an urgently needed donation today.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate