What Exactly Is a Pre-Existing Condition Anyway?

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The prospect that people with pre-existing medical conditions could lose their health insurance continues to be a flashpoint for Americans as Senate Republicans begin work on their legislation to replace the Affordable Care Act (ACA).

The possibility has created heated moments between constituents and lawmakers this week at packed town halls around the nation. It’s sparked a social media meme #I’maPreexistingCondition.

And it has raised questions about exactly what constitutes a pre-existing condition and who might have one. It has also fueled concerns that states granted waivers — spelled out in the House version of the bill passed last week — would hand over power to insurance companies to charge sick people with pre-existing conditions higher rates.

"I don't think people are overreacting to the implications of all this," says Sara Collins, vice president of health care coverage and access at the Commonwealth Fund, a nonpartisan foundation that conducts research on health and social issues. "Even a very minor health problem could result in higher premiums."

The central question could become how insurance companies in different states define pre-existing conditions. 

Before the Obama-era Affordable Care Act became law, insurance companies had the power. Cancer? Acne? A history of ear infections? They got to decide which conditions were significant enough to deny some or all coverage, or charge a higher premium. 

The House bill, called the American Health Care Act (AHCA), does say that insurers cannot deny coverage to people with pre-existing conditions. But it also allows states to let insurers charge higher premiums to sicker people if their coverage has lapsed.

To get a waiver to do that, states must set up a special health insurance program for sicker people. The AHCA would gives states a tremendous amount of flexibility to determine how that might work. And it’s not clear which states might apply for a waiver, though the governors of Wisconsin and South Dakota, both Republicans, already say they would consider applying.

The legislation says nothing about how states and insurance companies are to define what would qualify as a pre-existing condition.

The Senate is now working on its own version and must reconcile it with the House’s plan before the legislation could move forward and become law. Some Republican Senators have said they don't want to weaken protections for those with pre-existing conditions. 

The GOP says that the ACA needs to be repealed and replaced because of rising premiums and because states should be given more power over healthcare regulation.  

Clearly, the prospect of change is provoking anxiety for a lot of people.

In the second CR Consumer Voices Survey, conducted in April, 41 percent said they were not confident they and their loved ones will have access to affordable health insurance, up from 35 percent in January. The survey was conducted a few weeks before the House voted to approve the AHCA bill.

“The ACA has been [fully] in place since 2014. This is what people are used to,” says Collins, the Commonwealth Fund vice president.

The possibility that you might have to pay a lot more if you’re in ill health “is very frightening to people,” she says.

Count Kim Cooper among those terrified at the prospect of losing health insurance, or not being able to afford it. Her breast cancer was discovered in 2014 from a routine mammogram after she enrolled in ACA insurance, commonly referred to as Obamacare.

"Had it not been for Obamacare, I would either not have been able to get insurance or it would have been unaffordable. I am alive today because of Obamacare," says Cooper, 47, who lives in Jersey City, N.J. “For people like me, if this passes, we’re either not going to be insured or our insurance will be so astronomical, we won’t be able to afford it." 

Answers to Key Questions

Senate leadership wants to have a bill ready for members to review after Memorial Day. It's unclear when the nation's insurance law might change, or when or if coverage for those with pre-existing conditions could be affected.

Critics of the House legislation worry insurance companies operating in states with waivers will revert to their previous policies related to pre-existing conditions before the Affordable Care Act became law. Here are answers to some questions about how coverage worked pre-ACA for those with pre-existing conditions. It could give consumers some idea about how those with pre-existing conditions might be treated, if the House bill were to become law.

What is a pre-existing condition?

It’s a health issue that you have prior to applying for a new health insurance policy.

A wide range of major and minor health issues could be considered pre-existing. Pre-ACA, common conditions that typically triggered an outright denial ranged from cancer, heart disease and diabetes to pregnancy, depression and sleep apnea, according to an analysis of major insurer underwriting guidelines by Kaiser Family Foundation.

Taking certain medications also could result in an insurance denial, including prescription drugs for arthritis, infertility, diabetes, cancer, mental health issues and anemia, according to Kaiser’s report.

Beyond being denied coverage, many people were “rated up” or charged higher premiums or excluded coverage for specific conditions including acne, ear infections, bone fractures, menstrual irregularities, varicose veins and being overweight.

A health condition could be considered pre-existing if you received treatment or medical advice for that issue from six months to five years before the insurance coverage took effect. The time varied by state.

Some insurers did "post-claim" underwriting and would cancel coverage if you submitted an expensive claim for a service or condition in the first year of coverage.

Who determines if you have a pre-existing condition?

The insurance company. Pre-ACA, when you applied for health insurance, you filled out an application with your health history and insurers collected information from your medical records and other sources.

How many people have pre-existing conditions?

According to a January 2017 report by the Department of Health and Human Services, 51 percent of Americans under 65—131 million people—may have a pre-existing condition that could result in a rate hike, limited benefits or outright denial of insurance. The likelihood of having pre-existing conditions grows significantly with age. Up to 84 percent of those 55 to 64—about 31 million people—have at least one pre-existing condition, according to HHS.

What happens if an insurer finds you have a pre-existing condition?

Before the ACA, a few things could happen if you had a pre-existing condition. You could be denied insurance coverage. You could be charged significantly higher premiums. Or you could be offered a policy that excluded coverage related to your health issue. For example, if you were a cancer survivor, you might have been able to get insurance but it wouldn’t pay for any treatment if your cancer recurred.

In 2009, about one-third of people in the individual health insurance market were denied coverage, charged more or had exclusions placed on their policy because of health issues, according to a Commonwealth Fund report.

Do states offer consumers with health problems any protections?

Pre-ACA, some states required that insurers offer insurance to people with pre-existing conditions but imposed no restrictions on how much insurers could charge. Other states banned denying coverage for sick people but only to people who didn’t have a lapse in insurance, similar to the provision in the AHCA that allows states to deny coverage.

There are many precipitating factors that can cause people to lose insurance, says Collins, including the loss of a job, divorce, death of a spouse, or aging out of a parent’s policy. But sick people are more likely to have gaps in coverage: 23 percent or 31 million people with pre-existing conditions experienced at least one month without insurance in 2014, according to the Department of Health and Human Services. “A lot of people could fall into this gap,” says Collins.

Will the provision that allows higher rates for people with pre-existing conditions become part of the final legislation?

It’s pretty unpopular even among some Republicans. But even if that provision is eliminated, many other parts of the AHCA threaten to put insurance coverage out of reach for sicker Americans, says Linda Blumberg, a senior fellow in the Health Policy Center at the Urban Institute, a nonpartisan health and health policy research group.

The AHCA also calls for allowing states to waive a requirement that insurers cover 10 essential health benefits, including mental health, emergency services, maternity care and prescription drugs. That means even if you can get an insurance policy, but you have, say, diabetes, insulin might not be covered, says Blumberg. And older people—who are much more likely to have a health issue—can be charged up to five times more than a younger person, up from three times as much under the ACA.

“These other provisions essentially do the same thing,” says Blumberg.

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