Health Insurance and Pre-Existing Conditions in 2018: What to Expect

Health Insurance and Pre-Existing Conditions in 2018

With the Senate Healthcare bill stalled amid wrangling among its members, it is still likely that an Obamacare repeal and replace will still happen. It is a matter of time, and even though it is not repealed, there are bound to be significant changes, especially when it comes to pre-existing conditions.

Today all qualified health insurance plans must guarantee access to individuals regardless of their gender, weight or health history. This includes anyone who suffers from a pre-existing condition, including chronic conditions that might have high claims every year. On the other side of the spectrum, non-qualifying plans like short term medical insurance or limited benefit health insurance are allowed to ask medical questions and disqualify individuals with some pre-existing conditions. This helps keep the cost of the plans at more than half the price of regular health insurance.

What is a Pre-Existing Condition?

A pre-exiting condition, is basically an illness or medical condition, that existed prior to your applying for a health plan, whether or not any medical advice or treatment was recommended or received. The ACA prohibits health plans from imposing any pre-existing condition exclusions for plan and policy years beginning after September 23, 2010, for children under 19, and for all others beginning in 2014.

Before the ACA, each insurance company followed a set list of pre-existing conditions for its major medical plans in all but five states. For example, one insurance company in one state might accept a patient with sleep apnea while another would not. But it’s an important factor to keep in mind when shopping for a new medical plan once the ACA is repealed, replaced, repealed or amended. Will the insurance company cover claims that have the potential of being considered a pre-existing condition?

Current Proposal for Pre-Existing Conditions

In 2017, legislators are debating how to keep skyrocketing premium prices down, and one way to accomplish this is to change the rules for individuals with pre-existing conditions who traditionally cost more to cover than healthy individuals.

The committee shaping the Senate version of the American Health Care Act (to replace major portions of the ACA), is looking at whether individuals with pre-existing conditions should be moved into state-funded high-risk pools, and if they should be charged more for insurance because of their claims risk. The Republican bill taking shape could also penalize individuals if they drop their insurance coverage for a period of time, and then try to purchase at a later date. Re-enrollment could force a higher premium percentage for failing to keep continuous coverage. For those with pre-existing conditions, the threat of higher monthly premiums once Obamacare is repealed is a potential reality.

History of High-Risk Pools

Before Obamacare, 18 percent of Americans were denied health insurance coverage on average. Of that 18 percent, it is unknown how many were flagged with a pre-existing condition or if there were other issues, like immigration status or eligibility for Medicaid.

To combat uninsurability and rising costs, high-risk pools were operational in 35 states before the ACA and offered coverage to individuals with pre-existing conditions. The state pools were met with mixed results. Some states ran successful risk pools, but others struggled, which forced extremely high

premiums, maximum caps that reduced the number of claims the risk pool had to pay, and limited overall enrollment.

The first risk pools were formed in 1976 in Minnesota and Connecticut. By 1996 there were 25 state high-risk pools with more than 91,000 enrollees combined. By 2006 there were 35 state pools with more than 226,000 participants.

High-risk pools were not created equal, but most operated using similar principles that many argued kept the pre-existing condition population from enrolling en masse. Administratively they included:

Monthly Premiums Were Above Standard Market Rates

Most states capped the cost of health insurance between 150-200 percent of market rates. Of the 35 state risk pools, 19 offered subsidies to low-income households based on the federal poverty level. The remaining high-risk pools did not offer any premium cost relief.

Exclusions Due to Pre-existing Condition

Just because you enrolled in a high-risk pool for the uninsurable, didn’t mean you could use the insurance coverage for your pre-existing condition right away. Most state pools excluded coverage for any pre-existing treatment for the first 6-12 months of enrollment. A handful of states had just a three month waiting period before claims could be filed.

Coverage Limits

A majority of the state high-risk pools had a lifetime maximum cap of $1 million to $2 million (33 states total) on treatment and services. Some pools also imposed annual dollar limits on all covered services, and 13 state pools placed annual dollar limits on prescription drugs, mental health treatment and rehabilitation.

High Deductibles

Starting deductibles in most risk pools were a minimum of $1,000, but 10 states had a $5,000 minimum deductible.

By 2011 there were $2.6 billion in claims for the 226,615 high-risk population, according to the Kaiser Family Foundation. Monthly premiums only covered about 50 percent of the claims, forcing states to pay off the $1.2 billion difference.

In 2010 the Obama administration set up a temporary federal risk pool for individuals with pre-existing conditions to help them stay covered until the federal exchange debuted in 2014. Federal dollars totaling $5 billion went to the program, and enrollees also paid monthly premiums to help fund the pool. Within a year the federal pool was broke, with individual enrollees averaging more than $32,000 in claims over the course of the year. The high-risk pool was in debt six times more than what it was collecting in premiums. Enrollments were halted by March 2013 to preserve the existing pool from complete bankruptcy. Once the ACA went into effect in 2014, the federal risk pool was disbanded and enrollees went on the federal exchange.

It is estimated that there could be 2.2 million people with pre-existing conditions on the federal exchange or the state exchanges today, which would cost approximately $67 billion to cover.

Analyzing your health insurance options going forward will be a key to managing your monthly budget. If you do have a pre-existing condition that is under control, such as hypertension, high cholesterol, a hyperthyroid, sleep apnea or other ailments managed by prescriptions, Guaranteed-Issue Coverage medical insurance could be an affordable alternative.