Republicans Are Trapped on Preexisting Conditions
Their health-care plans’ lack of protections is a feature, not a bug.
There’s a reason Donald Trump has never produced a health-care plan that protects consumers with preexisting medical conditions: Ending protections for the sick is the central mechanism that all GOP health-care proposals use to try to lower costs for the healthy.
Every alternative to the Affordable Care Act that Republicans have offered relies on the same strategy—retrenching the many ACA provisions that require greater risk- and cost-sharing between healthy and sick Americans—to lower the cost of insurance for healthier consumers. Put another way: Reducing protections for patients with greater health needs isn’t a bug in the GOP plans; it’s a key feature.
“Lowering premiums was a big theme of the Republican effort to repeal and replace the ACA, and central to their idea of lowering premiums was rolling back protections for people with preexisting conditions,” says Larry Levitt, the executive vice president for health policy at the Kaiser Family Foundation.
The contrast between the parties over health care is certain to come into sharper relief in the weeks leading up to Election Day, starting with tonight’s first presidential debate between Trump and Joe Biden. Trump’s nomination to the Supreme Court of Amy Coney Barrett, who has openly questioned the ACA’s legality and could provide a decisive vote on the Court against it, ensures that the Senate debate over her confirmation will focus intently on a Trump-backed lawsuit from Republican state attorneys general to strike down the law. With oral arguments for that case beginning before the Court shortly after the election, Biden and other Democrats have stressed Barrett’s potential threat to the ACA, and warned that if the Court overturns the law’s protections for preexisting conditions, insurers would likely treat long-term complications from the coronavirus as a reason to deny coverage.
Trump, along with House and Senate Republicans, has insisted that the GOP intends to protect patients with preexisting conditions even if the Court strikes down the ACA; the president signed an executive order last week that, without offering any specifics, affirmed his commitment to that goal. Almost all the Senate Republicans facing voters this fall are running ads touting their commitment to ensuring coverage for Americans with preexisting health problems, and many of them have co-sponsored legislation that they say will do just that.
But an array of experts I spoke with agree that none of these initiatives will protect patients with preexisting health needs nearly as effectively as the ACA does, because the GOP plans still allow insurers to treat them differently from healthy patients, sometimes overtly and sometimes more subtly. “When you look at all of the components of reform that the Republicans, including Trump, have advocated for years and years now, every single one of them would … separate the health-care costs of the healthy from the sick to a greater extent than we have under current law,” said Linda Blumberg, a fellow at the Urban Institute’s Health Policy Center. More than 40 percent of U.S. households are estimated to have someone with a preexisting condition.
Before Barack Obama signed the ACA into law in 2010, people who were older or had greater health needs often found it impossible or unaffordable to buy coverage in the individual insurance market. Insurers would charge older consumers much more than younger consumers and women much more than men (because of the possibility that they would become pregnant). Insurers often excluded coverage altogether for people who had serious health conditions such as cancer or diabetes.
The ACA virtually ended all of that. It required insurers to offer coverage to people with preexisting conditions at affordable rates; blocked them from charging consumers more based on their health status (with an exception only for smokers); ended gender disparities in insurance pricing; limited how much more insurers could charge older people; barred annual and lifetime limits on costs (which previously had the effect of cutting off those with the greatest health needs); and required all plans to offer a broad package of essential benefits to every consumer (preventing insurers from charging extra for services needed mostly by people with serious medical problems).
Levitt told me that these provisions have proved extremely effective: “The ACA has far exceeded expectations in protecting people with preexisting conditions.” That success, though, has come at a cost. Healthy Americans are paying higher premiums than the law’s architects anticipated—or at least hoped for. “Democrats certainly don’t like to talk about the trade-offs that were involved in the ACA,” Levitt said. “But covering people with preexisting conditions isn’t free. It had to come from somewhere, and it came from higher premiums from people who are younger and healthier.”
The ACA’s approach to health care follows the Democrats’ philosophical guideposts. It involves a heavy role for government in regulating private-insurance companies, and it encourages—even demands—a high level of social solidarity. It asks younger and healthier adults to pay more, not only so that older and sicker Americans can have access now, but so that today’s young people can themselves have access later in life. (The single-payer proposals popular among many liberals, but not embraced by Biden, extend risk-sharing to its conceptual limit by placing all Americans in a single, government-run system and funding it with tax dollars rather than premiums.) The Democratic approach “is redistributive,” Blumberg said. “There is no way around it. When you force people to pool health-care costs, you are going to increase the costs for people when they would otherwise be perfectly healthy.”
The GOP health-care plans start from the opposite philosophical pole, stressing individual autonomy over solidarity and free-market competition over government regulation. While Trump hasn’t issued his own specific plan, he has offered a clear picture of his approach by endorsing both the ACA-replacement bill that House Republicans passed in 2017 and a contemporaneous proposal from GOP Senators Lindsey Graham of South Carolina and Bill Cassidy of Louisiana. Trump endorsed the Graham-Cassidy approach again in the budget he released in 2019. “The president’s vision of health-care reform has been quite clear even if he hasn’t put out a detailed plan,” Levitt said.
Each of those plans was centered on the same core belief that the ACA went too far in requiring the sharing of cost and risk between the healthy and the sick. “Essentially, the [Republican] view is, your premiums should reflect the risk you pose to the insurer, and insurers should be able to assess that risk and then set a rate accordingly,” says Sabrina Corlette, a professor at the Center on Health Insurance Reforms at Georgetown University. “I think the problem with that is, ultimately, it means older, sicker folks, women of childbearing age, will pay more under that system.”
The House GOP and Graham-Cassidy plans unraveled most of the ACA’s risk-sharing requirements, including by allowing insurers to impose greater surcharges on older consumers. The House plan also expanded tax-free health savings accounts that encourage healthier people to ditch comprehensive coverage and buy bare-bones insurance plans. Most important, both GOP plans empowered states to free insurers from the ACA’s requirements to cover preexisting conditions and offer a robust package of benefits.
Each of those provisions would have advanced the GOP’s goal of reducing premiums for the healthy, but at the price of making coverage more expensive or unavailable for Americans with greater health needs.
While the House and Senate plans did include funds for states to create “high-risk pools,” which would subsidize coverage for those requiring more medical care, such pools have been tried in about 30 states and have uniformly failed. States found that they could not allocate anywhere near the amount of money necessary to make coverage affordable for patients with preexisting conditions, and experts say the plans’ funding was equally inadequate. “The cost would have to be tremendous, and that is precisely because of the skewed distribution of health-care spending,” Blumberg said. “In order to make that coverage affordable for the people who need it, you would have to throw huge amounts of money at those pools.”
More recently, many Senate Republicans have rallied behind 2019 legislation from Senator Thom Tillis, who is facing a tough reelection fight in North Carolina. His bill declares that insurers must continue selling coverage to patients with preexisting conditions at comparable prices to what they charge other consumers. But the bill contains huge loopholes that undermine that promise. It allows insurers to limit the benefits provided in such coverage, which could exclude the treatments a patient needs. It also doesn’t maintain the ACA’s limits on out-of-pocket costs, or its ban on annual and lifetime benefits caps, which means those with substantial health problems could easily generate bills that exceed their coverage. All of those provisions provide insurers “another way of excluding coverage of preexisting conditions,” Sarah Lueck, a senior policy analyst for health care at the Center on Budget and Policy Priorities, told me.
Meanwhile, with repeal of the ACA again wending its way through the courts, Trump has tried to advance the GOP goal of unraveling risk-sharing through regulatory action. His administration has authorized insurance companies to sell more short-term plans that are exempt from the ACA’s requirements to cover patients with preexisting conditions and offer comprehensive benefits. Those plans provide an escape route for healthier consumers to buy cheaper coverage, which could tilt the general individual market more toward the sick, raising their premiums.
The paradox in the contrasting GOP and Democratic approaches, as I’ve written, is that the Democratic plans ask more of the young—who mostly vote for Democrats—while the Republican plans impose greater costs on older Americans, most of whom are white and have leaned toward the GOP for the past few decades.
Biden’s proposals to significantly increase federal subsidies for consumers purchasing insurance in the ACA marketplaces represent a tacit admission that the law’s original design may have asked healthier consumers to shoulder too much of the cost of ensuring coverage for those who are older and sicker. Expanding subsidies could also entice more younger and healthier people into the insurance market, which would help restrain costs. By contrast, Trump and other Republicans are still resolutely denying the inescapable reality that their proposals will increase costs and reduce access for the sick, not as an unintended consequence, but as the central lever to lower premiums for the healthy.
Those Republican denials haven’t convinced most voters. In the 2018 election, exit polls found that a solid 57 percent of voters said they trusted Democrats more than Republicans to protect patients with preexisting conditions, and they overwhelmingly backed Democratic candidates, fueling the party’s midterm gains. Similarly, polling released last week by the nonpartisan Commonwealth Fund found that voters in all 10 major swing states strongly preferred Biden over Trump on protecting such patients.
The contrasts between Trump and Biden on the issue are sure to surface at tonight’s debate. And by fast-tracking the confirmation process for Amy Coney Barrett, Senate Majority Leader Mitch McConnell has triggered another dynamic. He’s guaranteed that every vulnerable Republican senator will now spend weeks debating how to replace the protections for patients with preexisting conditions that would be lost if an expanded conservative Supreme Court majority invalidates the ACA.