Obamacare Pre-Existing Conditions

How Obamacare Protects Those With Pre-Existing Conditions

pregnancy was a pre-existing condition
••• Photo: Peter Dazeley/Getty Images

The Affordable Care Act forbids companies from denying insurance to anyone. As a result, those with chronic illnesses could receive the care they needed at a much lower cost than if they had to pay for it on their own.

Before Obamacare, insurance companies could deny you coverage if you had a pre-existing condition. That affected 50 million people, including 17 million children. Of those with pre-existing conditions who sought private insurance, 47 percent didn't get it. They were either denied coverage, charged a higher premium, or had their condition excluded because of it. 

Without health insurance, they couldn't afford treatment, which meant they wound up in the emergency room. Their expenses were either paid for by Medicaid or were absorbed by the hospitals. That resulted in higher health care costs for everyone.

The Individual Mandate

Why would insurance companies accept these higher-cost patients? Because Obamacare mandates that everyone must buy insurance. Insurance companies knew that mandatory coverage sends them more healthy customers who don't submit claims. They receive enough premiums from healthy people to cover the costs of the extra sick ones. The mandate is a necessary component in how Obamacare works.

Why is mandatory coverage necessary? Without it, people would just wait until they got sick before applying for insurance. That's not how insurance works. It's like allowing people to buy car insurance after they've had an accident.

President Trump's health care plan promised to repeal the mandate but keep insurance for those with pre-existing conditions. Insurance companies made states approve higher rates to prepare for it. 

Congress didn't pass the health care plan, but they did approve Trump's tax reform plan. It eliminated the tax on people who didn't get insurance effective 2019. By removing the penalty, Congress cut the legs out from under the mandate. 

What Qualifies as a Pre-Existing Condition

Insurance companies can consider any test, diagnosis, or preventive measure a pre-existing condition. They do this to reduce risk. Here are the most common pre-existing conditions, with their incidence if available, based on the most recent data obtainable as of November 2020. 

  • HIV/AIDS (1.2 million people in 2018): The Centers for Disease Control and Prevention warned that one in seven were unaware they had HIV.
  • Alzheimer’s (5.7 million in 2018): This is the most common form of dementia among older adults, according to the CDC.
  • Alcohol Use Disorder (14.1 million adults in 2019): This includes alcohol abuse or dependence. Over 7.5 million children lived in a household where a parent was dependent on alcohol in 2014. As a result, half of all adults have a family history of alcoholism. 
  • Cancer (1.8 million diagnosed in 2020): They were among 16.9 million cancer survivors living in 2020.  
  • Diabetes (34.2 million through 2018): According to the CDC.
  • Drug Addiction/Abuse (20.4 million in 2019): Thirteen percent of the population age 12 or older used an illegal drug in the past 30 days. Twenty percent have used prescription drugs for non-medical reasons at least once in their lifetimes. These include painkillers, sedatives, and stimulants. 
  • Fatty Liver Disease: Most problem drinkers who drink four to five drinks per day over decades get it. Another 25 percent of the population may have a non-alcoholic fatty liver. It's caused by diabetes, obesity, high cholesterol, hepatitis, or even malnutrition. It's when fat cells make up more than 10 percent of your liver. It can lead to cirrhosis and liver disease. 
  • Heart Attack (805,000 annually, 2005-2014): About 6.2 million Americans had heart failure from 2013 to 2016.  
  • Inflammatory Bowel/Crohn’s Disease: There were about 3 million sufferers in total in 2015.
  • Pacemakers: (200,000 a year as of 2016).
  • Kidney Failure (125,000 in 2016): More than 37 million people had chronic kidney disease. Diabetes caused about 38% of end-stage kidney disease, and high blood pressure, 26%.
  • Rheumatoid Arthritis (1.5 million as of 2018): That's in addition to the 32.5 million people with osteoarthritis.  
  • Stroke (795,000 people in 1999): In 2017, 146,383 strokes were fatal. 

Pre-Existing Conditions That Are Not Diseases

Insurance companies can consider a healthy person as having a pre-existing condition. They denied coverage to 26 percent of those seeking private insurance. The following were considered pre-existing conditions, even though they weren't diseases:

  • Intellectual Disability, (6.5 million in 2019): Defined as an IQ of 70 or below.  
  • Mental Health Counseling: A history of drug, alcohol or mental illness counseling was a reason for denial. 
  • Obesity (42.4% of adults and 17% of children in 2018-2019): Those with above-average Body Mass Index scores were either denied or charged extra.  In a 2006 study, annual medical costs for an obese person were $1,429 higher than average.  
  • Pregnancy (6.37 million in 2009 latest data): Women might have to wait a year after getting insurance before they could be covered for pregnancy. Before the ACA, only about 12 percent of plans covered maternity care.

How Insurance Companies Get Around It

Insurance companies have found ways around the ACA ban. For example, some companies place drugs needed by high-cost patients on a more expensive tier. That includes those with HIV/AIDS or multiple sclerosis. The AIDS Institute and the National Health Law Program filed discrimination claims against three insurers in Florida that required HIV/AIDS patients to pay 40 to 50 percent of drug costs out-of-pocket after deductibles as high as $1,000 to $2,750. They're trying to drive these patients to other plans that charge less for these drugs. 

Insurance companies may not cover certain drugs, or they may substitute lower-priced generics. If your doctor requires you to have the name brand drug, and your insurance company doesn’t cover it, the ACA has an appeals process. If you buy medicine that’s not on the formulary, it won’t count against your deductible or the out-of-pocket limit. You should check the insurance company’s formulary before you sign up. 

How You Benefit

More than half of Americans don't know that the Affordable Care Act protects them with this ban. If you are one of the millions with a pre-existing condition, you no longer have to worry whether you can afford to pay for your healthcare. You don’t have to stay with a job you can’t stand because of the benefits. 

Even those without pre-existing conditions benefit from lower healthcare costs. Those who had no insurance get preventive care instead of waiting until a crisis sent them to the emergency room. 

A study of Camden, New Jersey hospitals found that 1,035 patients, about 1 percent of the cohort examined, made almost 40,000 hospital visits, accounting for about 10 percent of all admissions, costing $375 million for medical care, from 2002 to 2007. If they were treated at a low-cost doctor’s office, it would reduce health care expenses for everyone.

In DepthHow the ACA Affects You | When It StartsPros and Cons | Obamacare Explained - Simple Enough to Explain to Your Kids | What's in the Actual ACA Itself