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

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. 

  • AIDS (1.1 million people): The Centers for Disease Control and Prevention 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): This 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. 
  • Cancer (1.6 million diagnosed each year): That’s added to the 14.5 million cancer survivors. 
  • Diabetes (20.9 million): According to the CDC.
  • Drug Addiction/Abuse (20 million): Eight percent of the population age 12 older used an illegal drug in the past 30 days. Another 20 percent use prescription drugs for non-medical reasons. These include painkillers, sedatives, and stimulants. 
  • Fatty Liver Disease: Most of the 20 million alcohol abusers get it. Another 20 percent of the population 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 (920,000 annually): There are 7.9 million heart attack survivors. 
  • Inflammatory Bowel/Crohn’s Disease: There are 1.3 million sufferers in total. 
  • Pacemakers: (188,000 a year).
  • Kidney Failure (113,000 annually): More than 20 million people have chronic kidney disease. That includes one-third of all people with diabetes and 20 percent of those with high blood pressure. 
  • Rheumatoid Arthritis (1.5 million): That's in addition to the 26.9 million people with osteoarthritis. 
  • Stroke (800,000 people annually): Nearly 130,000 are fatal. 

    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, (4.6 million): 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  (40 million adults, and 12.7 million children): Those with above-average Body Mass Index scores were either denied or charged extra. Annual medical costs for an obese person is $1,429 higher than average. 
    • Pregnancy (6.5 million in 2008 latest data): Women would have to wait a year after getting insurance before they could be covered for pregnancy.

      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. Three insurers in Florida require HIV/AIDS patients to 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. 

      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 Camden, New Jersey, hospital found that 1 percent of the 100,000 people who used its emergency rooms contributed 30 percent of its costs. That’s just 1,000 people. If they were treated at a low-cost doctor’s office, it would reduce health care expenses for everyone.

      Find out how to save money on Obamacare, see my book The Ultimate Obamacare Handbook.