WASHINGTON — Americans once could be blocked from buying health insurance due to ailments as basic as hay fever.
In fact, many conditions represented automatic disqualification, said Karen Pollitz, a senior fellow at the Kaiser Family Foundation, which studies health care and insurance.
“If you applied for insurance when you were pregnant or even thinking about getting pregnant, forget it, you would be turned down,” Pollitz said. “They wouldn’t even read the rest of your application. Diabetes, HIV, cancer — there was a list.”
Today, the Affordable Care Act prohibits insurers from discriminating on the basis of pre-existing conditions and limits what they can charge older or sicker customers.
But those protections are in the cross hairs because of a lawsuit brought by Texas and 19 other states, including Nebraska. And Attorney General Jeff Sessions recently decided the Justice Department will no longer defend those parts of the law in court.
That could jeopardize protections for millions, not just on the individual market, but also for those with employer coverage, particularly workers in small businesses, say law and insurance experts.
Republicans sought to repeal the ACA, also known as Obamacare, last year but could not settle on a replacement. During the debate, many GOP lawmakers expressed support for those with pre-existing conditions and continue to take that position.
But Republican approaches most often cited, such as high risk pools and health savings accounts, worry advocates who wonder if they will offer adequate protection.
University of Michigan law professor Nicholas Bagley said the administration does not appear to have thought through all the consequences of moving against one provision of a health law that has many complicated interlocking parts.
“The lack of care on the brief is jaw-dropping,” said Bagley, who considers himself a “free agent” critic of both sides but signed on to a brief in this case defending the law. “There is no question that the Trump administration has to clarify what the scope of its injunction would be and grapple with the consequences of mowing down parts of the ACA.
“For someone with a pre-existing condition thinking about switching jobs, the answer to the question could make a life-changing difference,” added Bagley.
Sick people not being able to obtain coverage was a driving force behind adoption of the Affordable Care Act. To help offset the cost of requiring insurers to cover everyone, the law also included a requirement that all Americans have health insurance and pay a penalty if they don’t.
When the U.S. Supreme Court found that Congress had constitutional authority for those insurance mandates, its decision hung in large part on the penalty and the rationale that the law represented an exercise of lawmakers’ authority to tax.
But Congress, with the support of all GOP lawmakers from Nebraska and western Iowa, passed a tax code overhaul last year repealing the penalty.
Now the states bringing the lawsuit argue that other parts of the law should be ruled unconstitutional as a result.
Nebraska Republican Gov. Pete Ricketts’ spokesman pointed to Washington when asked about the lawsuit and what could happen to those with pre-existing conditions.
“As Obamacare fails and Washington is forced to have a conversation about health care policy that works for Americans, Congress should be looking at continuity of coverage to protect people with pre-existing conditions,” spokesman Taylor Gage said. “Even under Obamacare, Nebraska has maintained its Comprehensive Health Insurance Pool, which could be one of many tools as federal health care policy evolves.”
Sen. Chuck Grassley, R-Iowa, is chairman of the Senate Judiciary Committee that oversees the Justice Department.
Grassley told The World-Herald that it’s not unprecedented for the Justice Department to decline to defend a law and echoed the logic of the lawsuit.
“Now that we’ve repealed that tax, it can’t be constitutional,” Grassley said of the ACA.
He said Congress needs to tackle issues in health care but doesn’t expect that to happen soon because “I don’t think the Democrats will let us.”
And when asked about those with pre-existing conditions, he quickly pointed to those locked out of the market now because of high insurance premiums.
“It isn’t the issue of just pre-existing conditions,” Grassley said. “It’s the issue that we’ve got to set up a regime where people that want to buy insurance can buy the insurance they feel that fits them best and what they can afford and companies ought to be able to sell it.”
Grassley said the ACA has not lived up to its promises of lower premiums and more competition. He noted that a number of states are down to one ACA insurer.
That includes both Nebraska and Iowa, where the only option is Medica.
Geoff Bartsh, Medica vice president for individual and family business, said repealing the individual mandate while doing nothing else remains a bad idea and can only have a negative impact on insurance markets.
He said it’s important to remember that Congress technically did not repeal the mandate but just the tax penalty associated with it.
“For most people that’s one in the same but they are distinct and for the attorneys arguing this is a big distinction,” he said. “If for some reason the current challenge to the ACA was successful, then we’re essentially back to the 2013 insurance market,” before the rollout of the ACA’s insurance exchanges.
Sen. Ben Sasse, R-Neb., is a member of the Judiciary Committee and ran for office in large part on his opposition to the ACA.
“The decision by the Department of Justice shows the complexities and challenges of this system,” Sasse said in a written statement. “Obamacare’s biggest challenge isn’t the Department of Justice, it’s basic math. The left needs to stop pretending that Obamacare works great, and the right needs to keep its promise to repeal and replace with a system that actually works to protect the most vulnerable in our communities, while driving down costs.”
Sen. Deb Fischer, R-Neb., said the lawsuit is a matter for state officials and downplayed the idea that pre-existing condition protections could go away.
“I haven’t heard anybody say that they want to get rid of pre-existing conditions,” Fischer said.
Sen. Joni Ernst, R-Iowa, hit a similar note and said she’d heard from colleagues that those with pre-existing conditions would be safe.
Meanwhile, the major trade groups for health insurers, hospitals and doctors last week filed briefs opposing the Texas lawsuit, along with the American Cancer Society and the American Heart Association.
Pollitz, the senior fellow at Kaiser, said that if the courts throw out the protections, then the individual market could revert to what she called the Wild West situation of years ago.
The practice of medical “underwriting” meant that insurance companies didn’t just deny coverage. When they granted it, they could say they wouldn’t cover the entire body part or system affected.
So someone with allergies might be granted coverage the didn’t include anything related to their respiratory system.
“If you fell off a horse and punctured a lung that wouldn’t be covered either,” Pollitz said. “Underwriting was pretty strict. As a result insurance was really cheap for some people but many of us would be unable to actually acquire such cheap coverage because we’re humans, and we have things go wrong from time to time.”
This report includes material from the Associated Press and the Washington Post.