Politics & Policy

Obamacare’s Illusion of Preexisting Condition Protections

Former President Barack Obama participates in a town hall meeting at the Orange County Fair and Event Center in Costa Mesa, Calif., March 18, 2009. (Larry Downing/Reuters )
Prohibitive costs placed coverage outside the reach of everyday Americans, including countless with preexisting conditions.

President Trump’s recent executive order laying out his “America-First Healthcare Plan” makes clear his continued commitment to the long-standing, bipartisan consensus that we should protect people with preexisting conditions. Unfortunately, the previous administration’s attempt to make good on that consensus — Obamacare — has failed to deliver on its promises.

Contrary to the prevailing media narrative, federal health insurance enrollment protections for preexisting conditions long predate Obamacare. Bipartisan legislation passed nearly 25 years ago protects people with preexisting conditions and prior health coverage from having to wait for their condition to be covered when they move to a new job. These protections apply to the 180 million Americans with job-based coverage, who represent roughly 90 percent of everyone with private health coverage.

Obamacare attempted to deliver additional protections for people with preexisting conditions in need of health-insurance coverage. The reality is, however, the law’s prohibitive costs placed coverage outside the reach of everyday Americans, including countless with preexisting conditions.

After premiums doubled and even tripled in some states once Obamacare regulations took effect, individual-market coverage became unaffordable and unusable for millions of middle-class and self-employed Americans earning too much to qualify for subsidies. A 60-year-old couple living in Hannibal, Missouri, who earn $70,000 a year faces a $37,000 annual premium for the lowest-cost silver plan — over half their income — and that’s before a staggering $12,000 deductible. For them, there are no protections if they have a preexisting condition. Sadly, Obamacare has failed to protect them.

It’s time the national debate over Obamacare finally confronts this reality. One can support maintaining formal preexisting protections in the individual market — as President Trump has done repeatedly, and has done again in his recent executive order — while honestly confronting the law’s poor track record in making those protections meaningful for real people.

The data bear this out. From 2016 to 2018, 2.5 million unsubsidized enrollees left the individual market. Census data in turn show that the number of uninsured with incomes greater than 400 percent of the federal poverty line — the cutoff point to qualify for federal tax credits — increased by 1.1 million in 2018.

In short, Obamacare created a new class of uninsured — none of whom, of course, have the slightest protection against their preexisting conditions.

The pandemic has underscored just how unaffordable and unattractive Obamacare remains to most Americans. Over the last six months, millions have lost their jobs and with them their health-care coverage. Each and every one of these individuals who held job-based coverage is eligible for enrollment, and many states opened enrollment to anyone who is uninsured. Still, relatively few have opted for Obamacare thus far.

Americans were promised Obamacare would protect them against discrimination on the basis of preexisting conditions. But when the price of unsubsidized coverage would bankrupt the average middle-class family, the promise of protection rings hollow.

By contrast, no one has done more to protect real people with real preexisting conditions than President Trump. He has not abided by the old, worn-out playbook of simply increasing taxes and spending more taxpayer dollars. Rather, he has addressed the underlying factors that limit access to care and make health care unaffordable in the first place. Under his watch, premiums have gone down for three consecutive years across HealthCare.gov, Medicare Advantage, and Part D health plans, while options have expanded for Americans who rely on these plans.

Moreover, his policies are driving toward a new age of transparency and interoperability where patients have the information they need — including the price of care and their medical records — to make the best health-care decisions with their doctor or to shop for new health-insurance coverage. This information will move us toward a system that increases provider competition and rewards lower-cost care. And that just scratches the surface.

The president’s antagonists are free to oppose his health-care agenda, marked by almost four years of increased patient control, fewer government mandates, and robust competition — an agenda that has delivered results. They are even free to defend the dubious legacy of Obamacare. But they should do so on the basis of fact, not fiction.

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