(The writer is a Reuters columnist. The opinions expressed are his own.)
By Mark Miller
CHICAGO, June 21 (Reuters) - Most Americans do not want to go back to the bad old days when health insurance companies could charge sick people more for coverage or turn them away altogether. But a lawsuit by 20 U.S. states seeking to invalidate protections against those practices contained in the Affordable Care Act (ACA) could allow just that - and older people will be hit hardest.
The lawsuit, Texas v. Azar, was brought in February by Texas and 19 other Republican-led states. It builds on the recent repeal, as part of last year’s tax reform law, of the ACA’s individual mandate which had required that people carry insurance. The plaintiffs argue that since the mandate was an essential part of the ACA, the entire law should be invalidated.
“With no remaining legitimate basis for the law, it is time that Americans are finally free from the stranglehold of Obamacare, once and for all,” Texas Attorney General Ken Paxton said when the lawsuit was filed.
More recently, the U.S. Department of Justice delivered a gut punch to supporters of the ACA last week, stating in a court filing that the Trump administration would not defend the law in the Texas litigation.
That marked a remarkable abandonment of the department’s traditional role of defending laws passed by Congress.
Public support for pre-existing condition protections is very strong. Polling by the Kaiser Family Foundation earlier this year found that 84 percent of Democrats support it, as do 68 percent of independents and 59 percent of Republicans. Amicus briefs supporting the protections have been filed by a wide array of healthcare stakeholders: groups representing doctors, hospitals, advocacy groups, public health scholars, health economists, the insurance industry, labor and small business.
Timothy S. Jost, a professor at Washington and Lee University School of Law, thinks the lawsuit is on shaky legal ground, but adds that the case will be heard by a judge with a track record of opposing the ACA in other cases.
A ruling is not expected until late summer, and appeals will take at least a year, according to Jost, who discussed the case during a webinar this week. Moreover, 23 states have some level of protection for people with pre-existing conditions.
But if Texas prevails, 52 million Americans with pre-existing conditions could lose coverage, face higher premiums or find themselves locked into their current coverage, Jost said. So would women and older people. “It’s a very dangerous lawsuit,” he said.
Ending protections for people with pre-existing conditions would hit older Americans disproportionately for a simple reason: they are not as healthy as younger people. A 2016 survey by the Commonwealth Fund found that 66 percent of people aged 55 to 60 say their health is fair or poor, or that they have a chronic condition, as did 67 percent of respondents aged 60 to 65. By contrast, just 35 percent of people aged 35 to 40 described their health in those terms.
Before the ACA, health insurance options for older people were very limited. Medicaid was available only for children, pregnant woman and very low-income parents. That meant that anyone without employer-based insurance had to go into the individual market.
In most states, insurance rules allowed insurers to charge premiums based on health, gender and age, and insurers could deny coverage due to pre-existing conditions, or exclude certain conditions from plans.
In 2010, 42 percent of adults aged 50 to 64 who tried to buy insurance in the individual markets were turned down, charged higher premiums or had a condition excluded, according to the Commonwealth Fund. “People had a really difficult time buying plans - the market was completely dysfunctional,” said Sara Collins, Commonwealth’s vice president of healthcare coverage and access.
Under the ACA, insurers can charge older people up to three times what they charge a younger customer. But older adults only pay a fixed share of their income toward premiums, with tax credits making up the difference. That has resulted in a huge jump in coverage. In 2016, 71 percent of adults aged 50 to 64 were able to buy a plan, up from 38 percent in 2010, according to Commonwealth.
The repeal of the individual mandate already is hurting the Medicare program. The Medicare trustee report issued earlier this month showed that the hospital insurance trust fund will be depleted in 2026, three years earlier than previously forecast. One cause: hospitals are expected to have more uninsured patients, and Medicare pays for that uncompensated care.
Medicare costs likely would rise further if pre-existing condition protections are scrapped. Research published in 2009 in the Annals of Internal Medicine (bit.ly/2t7Seti) found that Medicare spending was significantly higher for people who were uninsured before enrolling in the program. The biggest difference was for hospital stays by patients with cardiovascular disease or diabetes. Not surprisingly, the researchers found that uninsured people delayed getting needed care until they became eligible for Medicare.
“People in that older age group were entering the program in poorer health,” Collins said. “They needed to get caught up.” (Editing by Matthew Lewis)