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AHCA Could Jack Up Premiums for 6.3 Million With Pre-Existing Conditions

May 17, 2017

The American Health Care Act (AHCA) could lead to much higher health insurance premiums for more than six million Americans with pre-existing conditions, according to a new report by the Kaiser Family Foundation.

That Obamacare replacement bill, which narrowly passed the House of Representatives earlier this month, would allow states to apply for a waiver from the Obamacare provision prohibiting medical underwriting. Under that practice, insurers base premiums on consumers’ health status. Before Obamacare was fully implemented in 2014, medical underwriting often led to people with pre-existing conditions being charged more--or denied coverage outright--on the individual market.

The AHCA would shield people from medical underwriting if they maintain “continuous coverage,” which the bill defines as not having a gap in coverage of 63 or more consecutive days in the prior year. But according to the Kaiser Family Foundation analysis, 6.3 million Americans with serious pre-existing conditions had at least a two-month coverage gap in 2015.

These people have conditions such as cancer and diabetes that would have likely led to them being declined coverage on the individual market before 2014.

The AHCA wouldn’t allow these people to be denied coverage, but they could be charged prohibitively high premiums for up to a year in states that apply for a waiver. It wouldn’t be a surprise to see premiums of three, four or five times what a healthy person would pay, says Karen Pollitz, senior fellow at the Kaiser Family Foundation and one of the report’s authors.

“These are the ones insurers don’t want,” Pollitz says. These sicker patients’ needs are such that insurers know they’ll lose money on these people regardless of what the companies charge in premiums, Pollitz says, so the insurance companies would set premiums so high that these individuals couldn’t afford coverage in the first place.

The Senate is now working on its own health care bill, and the version that emerges could make significant changes to the version that passed in the House. Experts expect the Senate’s process to take months.

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