American health care has a new third rail

American health care has a new third rail
© Getty Images

It’s the guarantee — provided for the first time to all Americans by the Affordable Care Act — that people with pre-existing health conditions will have access to affordable private health insurance.

The coverage of 54 million Americans with health problems would be at risk if the protections currently contained in the Affordable Care Act (ACA) are declared unconstitutional in a pending court case, or if opponents of the law succeed in renewed efforts to repeal it. 

The “pre-ex” question — how to assure that individuals with pre-existing health conditions can get affordable insurance coverage — resonates at the kitchen table.

ADVERTISEMENT

Americans overwhelmingly want to protect their sick family members, friends and neighbors. Eighty two percent support guarantees of coverage regardless of pre-existing conditions and even if it increases premiums.

And the issue figured prominently in Democrats’ resurgence during the 2018 election cycle following a year-long effort by Republicans in Congress to ‘repeal and replace’ the ACA. 

Progressives have little exposure on the pre-ex issue. They support maintaining or expanding the ACA’s coverage, or even going beyond it to adopt some version of universal public insurance, which would cover everyone, no questions asked.

Conservatives face a tougher challenge. They generally favor private-sector solutions to health care problems, but private health insurers left on their own have historically failed to cover many of the sickest Americans. This leaves conservatives between a rock and a hard place in any attempt to balance limited government principles with the realities of the private health insurance market. 

People with pre-existing conditions are, by definition, usually sicker, so they are riskier and often less profitable to insure even if private plans charge high premiums that are unaffordable for all but the wealthiest individuals. This was the dilemma that faced many sick Americans without employer-sponsored coverage, Medicare or Medicaid before the ACA.

ADVERTISEMENT

One solution would be to make sure that private insurers enroll enough healthy people so that gains from these low-cost customers offset losses from the pre-ex population.

But that is easier said than done because many healthy people know they’re not likely to need care, so either don’t enroll, or favor skimpy, low-cost policies that don’t provide the revenues needed to cross-subsidize individuals with pre-existing problems.  

Herein lies the rub for conservatives — to fix this failure in the private market, government must get involved. First, it must require that private insurers accept individuals regardless of their health status. Second, it must require that plans charge affordable premiums that are not related to customers’ health. This is called community rating.

Third, government must assure that private insurers have an ample supply of healthy customers who pay for generous coverage — a balanced risk pool in insurance lingo. This last condition requires that government either subsidize the purchase of private insurance for people who can’t afford it (the poor, near poor, or increasingly, the middle class) or mandate the purchase of comprehensive private insurance, or both.

These are the strategies the ACA put in place. And its expansions of government authority are precisely the reason that conservatives oppose the ACA or anything like it.

As an alternative, some conservatives propose letting states decide what to do on the pre-ex issue. This approach would allow federal legislators to stay true to conservative principles, while still favoring, in principle, coverage for pre-existing conditions.

But this leaves proponents open to the accusation that they are just passing the buck, especially since states with conservative leadership may be similarly unwilling or unable to take the actions needed to make private insurance markets viable for those with pre-existing health conditions.

Faced with similar dilemmas in the past, conservatives have come up with novel solutions. Indeed, the very idea of an insurance mandate originated with conservatives seeking market-based alternatives to Democratic proposals for universal, government-sponsored health insurance.

Much is yet to be determined about whether the ACA will survive in the courts, and what 2020 candidates might propose to solve the pre-ex problem if the ACA is struck down by the Fifth Circuit Court of Appeals. But there is no doubt that protecting people with pre-existing conditions has become an entrenched and broadly shared American value.

Voters should demand that candidates address the pre-ex issue forthrightly and should carefully examine promises — whether from the right or the left — that claim to solve the problem. 

David Blumenthal, M.D., M.P.P., is president of The Commonwealth Fund, a national philanthropy engaged in independent research on health and social policy issues.