In his State of the Union speech before Congress last night, President Trump stated, “I’ve also made an ironclad pledge to American families. We will also protect patients with pre-existing conditions.”
I have come to judge politicians not by what they say (not that that is not important), but what they do. Using this framework, I would have to say that President Trump, his administration and Republicans in the Senate are not keeping this pledge and quite the contrary, have actually made efforts to significantly weaken protections for patients with pre-existing conditions.
First of all, let’s understand what the issue is and what some of the associated insurance terms mean. The Centers for Medicare and Medicaid Services (CMS) estimates that 129 million Americans, or basically 1 of every 2 Americans, could be denied affordable health insurance based on pre-existing conditions without the protections of the Affordable Care Act (ACA) or group insurance, such as employer-sponsored insurance. This could happen in plans that are not ACA-compliant through a process called underwriting.
For those of us old enough to remember, before the ACA, we would have to answer a number of questions about our health in an application for insurance coverage. Together with a review of medical records, insurance companies could then deny coverage, exclude coverage for the pre-existing condition, provide for a waiting period of say a year during which claims related to the pre-existing condition would not be covered and/or charge significantly more in premiums to cover the pre-existing condition. Many people were unable to get insurance coverage or obtain coverage at an affordable rate if they had a pre-existing condition. This then meant that their underlying condition(s) went untreated, the person got treatment, but then went into significant debt or even bankruptcy or the patient depended upon charity care or Medicaid once they went through their assets to pay for care as long as they could.
When dealing with pre-existing conditions, there are two phrases that are important to understand. Guaranteed issue means that insurance coverage cannot be denied based on your pre-existing condition(s). Guaranteed issue is a requirement of ACA-compliant plans. But, if insurance companies were merely required to accept everyone with pre-existing conditions, they would then adjust your premiums to account for the increased risk of loss (payments by the insurance company) related to your pre-existing condition. For many with pre-existing conditions, this insurance coverage would be unaffordable.
So, this is where community rating comes in. Community rating, another feature of the ACA, requires that premiums be offered that do not vary with the illness burden that an individual has, but rather is tied to the geographic area in which the person lives. For example, insurance coverage will, in general, be less expensive in the mountain states than on the east coast of the country because of the higher cost of living and therefore higher wages that have to be paid to health care workers on the east coast compared to in the mountain states. But a person with diabetes would not be charged a higher premium for the diabetes regardless of where he or she lives. The only factors the ACA allows for insurance companies to use to factor into premiums beyond where their insureds live are age, gender and smoking.
Here is why I come to the conclusion that the President, his administration and Republicans are not acting consistent with the President’s pledge and his comments in the State of the Union address:
- Texas v. U.S. I have written about this case on my blog. It is a case brought by 20 Republican states challenging the constitutionality of the individual mandate, and in turn, the entire ACA, after Congress reduced the penalty associated with the individual mandate to zero in the 2017 Tax Cuts and Jobs Act. It is not essential to review these constitutional issues here to make my point.
If the Republican states are successful in their challenge (and so far, they have been in the federal district court, with a decision that the individual mandate is unconstitutional being affirmed by the U.S. Court of Appeals for the Fifth Circuit), then the key provisions of guaranteed issue and community rating may also be struck from the ACA if the courts ultimately decide that the individual mandate is integral to these provisions. I predict that the federal district judge will conclude that is the case (though I believe that is a legally incorrect conclusion), but I do hold out hope that the U.S. Supreme Court will conclude that the individual mandate can be removed from the ACA without the need to strike down other provisions of the ACA.
So, what does President Trump have to do with this? Well, in the overwhelming majority of cases, the Department of Justice defends existing laws from constitutional challenges. There are exceptions to be sure, but they are quite few. Generally, on those rare occasions when the Department of Justice does not defend the constitutional challenge, it is because the current administration is very opposed to the current law on political grounds. For example, the Obama administration’s justice department did not defend a constitutional attack on DOMA – the Defense of Marriage Act – due to political objections to its provisions.
The Department of Justice has not defended most of the challenge against the individual mandate, and in turn, the ACA. Certainly, President Trump and many Republicans in Congress have not made a secret of their disdain for the ACA.
Because of the Republican states’ challenge that not only is the individual mandate unconstitutional (an argument with which I agree), but that as a result the remainder of the ACA must also be struck (an argument with which I strongly disagree from not only a legal analysis, but also with respect to the severe disruption this would cause to the American health care system – the topic of a future blog post), the failure of the Department of Justice to make a full-throttled defense to preserve the remainder of the ACA other than the individual mandate, and especially to fail to defend the law without a viable alternative in hand that could pass the House and Senate and be signed by the President, is a display of the administration’s contempt for the ACA without an equal concern for the well-being of the huge number of Americans who would then lose the protections of guaranteed issue and community rating.
- On July 28, 2017, Senate Republicans voted to repeal “Obamacare,” but were thwarted by Sen. John McCain’s now famous thumbs down “no” vote. Though they came dangerously close to repealing the ACA, once again, they had no viable alternative capable of gaining enough support to be enacted by Congress that would protect guaranteed issue and community rating. Had Republican Senators been successful in their repeal effort, millions of Americans with pre-existing conditions would likely have lost their insurance coverage, and for some, perhaps their lives.
- Despite President Trump repeatedly proclaiming that Republicans would be the party of health care and that he would roll out a new health care plan that would be far better and protect those with pre-existing conditions, no such plan has been put forth, and in fact, the President has indicated there will be no such plan until after the 2020 election. Given that health care is the number one issue for voters, one would think that if a great plan existed, Republicans and the President would want to tout that during the 2020 campaign.
- Another action that threatens coverage for those with pre-existing conditions is the administration’s push for short term plans and other non-ACA-compliant plans, such as association health plans. While less expensive, these non-ACA plans do allow for underwriting and generally have fewer covered benefits – two features that work to dissuade those with pre-existing conditions from purchasing them. The problem is that these plans do attract younger and healthier individuals that then takes them out of the risk pools with older individuals with pre-existing conditions, which in turn, causes premiums for plans that cover pre-existing conditions to go up and become less affordable for those who need coverage for these illnesses or disabilities.
So, certainly, I cannot come to the conclusion that Republicans are the party of health care. Rather, I think the current President and Congress have done more to harm health care coverage for the most vulnerable more than any other administration I can think of. Further, rather than carrying out an “ironclad pledge” to protect people with pre-existing conditions, the current President, administration and Republicans in Congress are the single biggest threat to continued protections for those with pre-existing conditions.
Now, before you conclude that I am a “never-Trumper” or Democrat, neither of which is true, let me say that while Democrats have scored high in my book for protecting those with pre-existing conditions, I have plenty to fault Democrats on their health care policies, as well. In fact, I will be getting to that, probably in my next blog piece.
It has become increasingly clear to me that Washington D.C. is broken and unlikely to fix health care. That means it falls upon us in the industry to fix it. Unfortunately, there are few health systems, insurance companies or physician groups willing to take the financial risks and do the hard work it would take to transform health care.
St. Luke’s Health System is one of those health systems actively working to transform health care and fix it – provide unparalleled quality, move from fee for service to full risk arrangements, improve access and improve affordability. That work began under my leadership of the health system and will now continue under the new CEO, Chris Roth. While we acknowledge that Washington is unlikely to fix health care, all we ask is that Washington not get in our way of fixing it. That means protecting affordable coverage for those with pre-existing conditions. Loss of protections for those with pre-existing conditions will mean poorer health outcomes, more bad debt and more charity care – all things that we will have to react to and deal with rather than doing the work we have embarked on to transform health care.