Obamacare Pre-Existing Conditions

How Obamacare Protects Those With Pre-Existing Conditions

pregnancy was a pre-existing condition
Insurance companies denied insurance to pregnant women, which they considered a pre-existing condition. Photo: Peter Dazeley/Getty Images

The Affordable Care Act forbids companies from denying insurance to anyone. Those with chronic illnesses can now receive the care they need at a much lower cost than if they had to pay for it on their own.

Why would insurance companies accept these higher-cost patients? Because Obamacare mandates that everyone must buy insurance. Companies know that mandatory coverage will send them more healthy customers.

Mandatory coverage gives insurance companies enough premiums from healthy people so they can afford to cover those with pre-existing conditions. For more, see How Does Obamacare Work?

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 individual mandate but keep insurance for those with pre-existing conditions. If it had passed, insurance companies would have raised the rates for those with the conditions. 

Republicans' latest revision to the ACA would allow states to waive the pre-existing conditions clause if they could lower rates without it. They could also waive the rule if they could increase the number of insured people, or otherwise advance "the public interest of the state." (Source: "A New G.O.P Health Proposal Evokes the Old Days," The New York Times, April 20, 2017.

"White House Officials Push Revised Health Bill," The New York Times," April 20, 2017.)

That would basically return you to the world before Obamacare. Insurance companies could deny you coverage if you had a pre-existing condition. That affected 50 million people, including 17 million children. 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.

What Qualifies as a Pre-Existing Condition?

Insurance companies can rule that any test, diagnosis or preventive measure can be considered a pre-existing condition. Why? They're in business to reduce risk. Prior to the ACA, 47 percent of those with pre-existing conditions who sought private insurance were either denied coverage, charged a higher premium or had their condition excluded because of it. 

Here are examples of the most common pre-existing conditions, with their incidence if available.

  • AIDS (1.1 million people): The Centers for Disease Control and Prevention (CDC) warns that one in six are unaware they have it.
  • Alzheimer’s (5 million): This is the most common form of dementia, according to the CDC.
  • Alcoholism (17.6 million): There includes alcohol abuse or dependence. That means 7 million children live in a household where a parent is dependent on alcohol. As a result, half of all adults have a family history of alcoholism. (Source: Alcohol and Drug Information,” National Council on Alcoholism and Drug Dependence, Inc.)
  • Cancer (1.6 million diagnosed each year): That’s added to the 14.5 million cancer survivors. (Source: “Cancer Facts and Figures," American Cancer Society.)
  • Diabetes (20.9 million): According to the CDC.
  • Drug Addiction/Abuse (20 million): That's 8 percent of the population age twelve and older who used an illegal drug in the past thirty days. Another 48 million people (20% of the population) use prescription drugs, such as painkillers, sedatives, and stimulants, for non-medical reasons. (Source: “Alcohol and Drug Information,” National Council on Alcoholism and Drug Dependence, Inc.)
  • Fatty Liver Disease: Most of the 20 million alcohol abusers get it. Another 20 percent of the population have non-alcoholic fatty liver, which can come from 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. (Source: “Fatty Liver Disease,” WebMD.)
  • Heart Attack (920,000 annually): There are 7.9 million people heart attack survivors. (Source: “Heart Disease Facts,” The Heart Foundation.)
  • Inflammatory Bowel/Crohn’s Disease: There are 1.3 million sufferers in total. (“Epidemiology of the EBD,” Centers for Disease Control and Prevention.)
  • Pacemakers: (188,000 a year): (Source: Amy Norton, “More Americans Getting Pacemakers,” Reuters, September 26, 2012. )
  • Kidney Failure (113,000 annually): More than 20 million people have chronic kidney disease. That's includes one third of all diabetics and 20 percent of those with high blood pressure. (Source: “Kidney Facts and Figures," Centers for Disease Control and Prevention.)
  • Rheumatoid Arthritis (1.5 million): That's in addition to the 26.9 million people with osteoarthritis. (Source: “Rheumatoid Arthritis,” Centers for Disease Control and Prevention.)
  • Stroke (800,000 people annually): Nearly 130,000 are fatal. (Source: “Stroke Facts,” Centers for Disease Control and Prevention.)

Another 26 percent could be denied coverage for what the insurance company called a pre-existing condition, even though they were healthy. The following were considered pre-existing conditions, even though they weren't diseases:

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, like those with HIV/AIDS or multiple sclerosis, on a more expensive tier. Three insurers in Florida – CoventryOne, Cigna, and Preferred Medical – require that HIV/AIDS patients pay 40 percent of drug costs out-of-pocket. That's around $1,000 a month.They're trying to drive these patients to other plans that charge less for these drugs (Source: Sophie Novack, “Is Obamacare Living Up to Its Pre-existing Promise?” National Journal, June 23, 2014.) 

Insurance companies may also not list certain drugs, or 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 a drug that’s not on the formulary, it won’t count against your deductible or the out-of-pocket limit. Therefore, it’s a good idea to check the insurance company’s formulary before you sign up. (Source: Igor Volsky, “No, Obamacare Won’t Cover Every Drug – Just Like Every Other Insurance Policy,” ThinkProgress.org, December 10, 2013)

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. Here's How to Get Obamacare and When Does It Start?  

Even those without pre-existing conditions benefit from lower healthcare costs, as those who had no insurance get preventive care instead of waiting until a crisis sent them to the emergency room. How Much Will Obamacare Cost Me?

For example, a Camden, New Jersey, study showed that just one percent of the hundred thousand people who used its emergency rooms were responsible for 30 percent of its costs. That’s just a thousand people. If they can be treated for their illnesses at a low-cost urgent care or doctor’s office, it will reduce healthcare expenses for everyone dramatically.(Source: "Millions with Pre-existing Conditions," Factcheck.com, February 4, 2011.)

More on Obamacare

Find out how to save money on Obamacare, see my book The Ultimate Obamacare Handbook (2015 - 2016).