By: Betsy McCaughey, Wall Street Journal, Wednesday, January 18, 2017
Can Democrats scare Republicans into giving up their plans to repeal ObamaCare? They’re certainly trying: President Obama recently warned that if Congress junks the Affordable Care Act, “133 million Americans with pre-existing conditions” will be in jeopardy. That’s a phony figure, for several reasons. The actual number is roughly 500,000.
For starters, half of Americans get their insurance through an employer, according to the Kaiser Family Foundation. Another 34% are on Medicaid or Medicare. For all these people, pre-existing conditions are no barrier to coverage.
Pre-existing conditions mattered before ObamaCare only in the individual market, but even there few were affected. In 2010 Rep. Henry Waxman, then the Democratic chairman of the House Energy and Commerce Committee, issued a report on the individual market. It stated that the four largest insurers—Aetna, Humana, UnitedHealth and WellPoint—declined to issue policies to about 250,000 people a year because of their medical histories. A 2011 report from the Government Accountability Office found a similar number.
The Waxman memo also explains that insurers also sometimes issued policies with “riders” to exclude certain coverage. The four big insurers refused to pay about 70,000 claims a year because of pre-existing conditions.
Even so, many people with pre-existing conditions managed to get health coverage through the high-risk pools run by 35 states. Those pools covered about 225,000 people in 2011, according to the Kaiser Family Foundation.
But some states did not operate high-risk pools. Others, including California and Florida, had patients on waiting lists or capped enrollment. So in 2010 the Obama administration opened a temporary nationwide high-risk pool to serve that unmet need. Enrollment peaked at 115,000 in March 2013, Kaiser reported.
Adding together these figures indicates that around 500,000 people with pre-existing conditions would need protection once ObamaCare is repealed. That’s a minuscule fraction of Mr. Obama’s 133 million. The president’s number is from a misleading report produced by his own Department of Health and Human Services, which vastly exaggerates the health problems serious enough to result in a coverage denial. For example, the report counts 46 million people with high blood pressure. Even more deceptively, the report includes people covered by employer plans or Medicaid.
Not even ObamaCare architect Jonathan Gruber says that the ban on pre-existing conditions expanded the ranks of the insured. An October article for the New England Journal of Medicine, co-written by Mr. Gruber, attributes 63% of the gains in coverage under ObamaCare to the expansion of Medicaid and 37% to the subsidies for buyers with low incomes. The individual mandate, the paper states, had “no significant effect.” Pre-existing conditions aren’t even mentioned.
Republican plans to repeal and replace ObamaCare include re-establishing federally funded high-risk pools, with a guarantee of no waiting lists. That’s likely to cost $16 billion to $20 billion annually—or about $32,000 per person, which was the average patient cost in the federal high-risk pool in 2012. Sixteen billion dollars is far more than what Republicans are currently budgeting, but far less than the $56 billion that will be spent on ObamaCare subsidies this year, according to the Congressional Budget Office.
Patients with serious illnesses probably would be better off with coverage through high-risk pools than under the status quo. ObamaCare plans offer narrow networks that exclude many top-drawer hospitals and specialists like oncologists.
High-risk pools would also subdue premium increases for healthy buyers by removing the largest costs from the insurance pool. The sickest 5% of Americans account for 50% of health-care spending, according to Kaiser. The healthy can see that paying the same price for insurance as the sick is a bad deal. That’s why ObamaCare enrollment skewed older and sicker than expected, causing insurers to lose $2 billion a year. UnitedHealth, Aetna and others have fled the market or dramatically raised premiums. Funding high-risk pools for the sickest Americans—and doing it soon, as part of this month’s budget reconciliation—could avert a market collapse.
That’s what Alaska did last June. State officials acted on their own to stave off a 40% increase in ObamaCare premiums by paying for the sickest people with $55 million in taxpayer funds. It worked, keeping premium growth to single digits. Congress can do the same for the entire nation. It will mean improved coverage for people with serious illnesses and a fair deal for the healthy.
That beats scaring the nation with phony numbers and fake news about pre-existing conditions.
—Ms. McCaughey, a senior fellow at the London Center for Policy Research, served as lieutenant governor of New York
