ANALYSIS: Obama plan helping those with pre-existing health conditions

Introduction

Today I return to addressing some of the concerns that people are having with obtaining coverage or dealing with their health insurance carriers. Many of the questions I have received pertain to pre-existing conditions, including the one below that was received via Twitter:

@Bubbe5000 asks: “Will people with pre-existing conditions EVER get health care for their pre-existing conditions?”

Dear Bubbe:

The short answer to your question is “yes,” thanks to the Affordable Care Act, a.k.a. ObamaCare.

Some background: One of the reasons the number of Americans without insurance has increased to more than 50 million is because it has been perfectly legal for insurance companies to refuse to sell coverage to people who have been sick in the past. This includes those who were born with birth defects or who were diagnosed with chronic illnesses when they were children. In fact, many parents have learned that they could not add a child to a family policy because the child had been treated for a condition that was on their insurer’s automatic denial list.

The practice also penalizes adults who have enough money to buy just about anything they want—except health insurance. I have met very wealthy people who have been turned down by every insurance firm they’ve applied to because of a pre-existing condition. Once you’ve been turned down by one insurer, your chances of getting coverage from another one are slim to none. That’s because one of the first questions on every application for health insurance policies sold on the individual market is, “Have you ever been denied coverage?”

Every insurer has its own list of conditions that will result in a denial, but unless you live in a state that forces insurance firms to make their lists public, like California, good luck finding out in advance of applying for coverage if your pre-existing condition is on the list.

The California Department of Insurance provides a valuable public service by listing on its Web site the health conditions that likely will result in either an automatic denial or a much higher monthly premium.

The list for automatic denial is long. It includes heart disease, cancer, diabetes, multiple sclerosis, muscular dystrophy and stroke and even allergies and mild depression.

Refusing to sell coverage to people with pre-existing conditions not only helps explain the swelling ranks of the uninsured in this country but also the record profits health insurance companies have been posting in recent years. When you refuse to sell coverage to people who really need it, you don’t have to spend much paying claims.

Fortunately, ObamaCare already is forcing insurers to change their business practices. Insurance firms no longer can refuse to cover children with pre-existing conditions. In 2014, the law will also apply to adults. Insurers will also not be able to discriminate against people with pre-existing conditions by charging them far more than healthier people. As it is now, even if insurers that sell policies on the individual market agree to cover care for pre-existing conditions, the premiums they charge are often beyond the means of many Americans to pay them.

And even though the reform law will not prohibit insurers from refusing to sell coverage to adults with pre-existing conditions until 2014, it does provide help that wasn’t in place in many states before the law was enacted. Although people in some states were able to enroll in high-risk insurance plans before the federal law was passed, these plans were not available in many states. Now, federally operated plans are available in states that did not previously offer them.

The Pre-Existing Condition Insurance Plan (PCIP) makes coverage available to any U.S. citizen who has been denied insurance because of a pre-existing condition, so long as they have been uninsured for at least six months. That doesn’t mean that the premiums will be cheap, but coverage is available, and many people with pre-existing conditions who have enrolled in PCIP are now insured for the first time in a long time. For more information on the plan and to determine benefits and rates in your state, visit healthcare.gov, a Web site of the Department of Health and Human Services.

It’s important to note that most employers that offer coverage to their workers do not refuse to cover care for pre-existing conditions, at least after a certain amount of time. So if you’re employed by a company that provides group coverage and that subsidizes the premiums for workers and their dependents, think twice before declining to enroll in a company plan. Chances are you will be able to get better benefits at a lower price through a group plan than you can get on the individual market, including in a Pre-Existing Condition Insurance Plan.

Have a question about your health insurance? Wendell Potter wants to help. Email your health care coverage issues to: askwendell@iwatchnews.org. Your question may be answered in an upcoming ‘Ask Wendell’ column.