Fates of some people with pre-existing conditions uncertain if Affordable Care Act is suspended

Would the Wisconsin Legislature be willing to adopt many of the provisions in the Affordable Care Act? 

That would have to happen for Gov. Scott Walker to make good on his promise last week to ensure that people with pre-existing health conditions have access to insurance if Wisconsin and 19 other states succeed in having the law declared unconstitutional. 

Here’s one reason: The Affordable Care Act requires insurers to cover specific health benefits, including prescription drugs for almost every medical condition.

Without a similar requirement in state law, insurers could sidestep any requirement that they cover pre-existing health conditions.

They could do this by not including some services or costly drugs in a health plan's benefits.

“Insurers could go back to providing whatever they want to provide,” said Karen Pollitz, a senior fellow at the Kaiser Family Foundation, which does research on health policy.

That holds true up to a point.

State law requires insurers to provide common health care services, though the regulations do not include some benefits required under the Affordable Care Act and do not include prescription drugs, said J.P. Wieske, deputy commissioner of the Office of the Commissioner of Insurance.

Here's a look at some of the questions raised by Walker's promise last week.

What was behind the governor's promise to ensure coverage for people with pre-existing conditions?

The governor made his promise after attacks in the gubernatorial race for Wisconsin’s participation in a federal lawsuit to have the Affordable Care Act declared unconstitutional.

Wisconsin and 19 other states filed the lawsuit in Texas in February.

On Sept. 5, a hearing was held on the states’ request for a preliminary injunction suspending the Affordable Care Act or at a minimum striking down the parts of the law that prohibit health insurance companies from not covering people with pre-existing health conditions or charging them higher rates.

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The Trump administration has partially sided with the states, asking the court to strike down the protections for people with pre-existing conditions but not the entire law.

The administration is not seeking a preliminary injunction, citing the disruption it would cause in the market for health insurance sold to individuals and families who do not get health benefits through an employer.

What would happen if the court granted a preliminary injunction?

The 16 Democratic attorneys general who have intervened in the case would likely seek a stay.

That would prevent the market for health insurance sold to individuals and families from being thrown into chaos less than two months before the open-enrollment period begins to buy health plans for next year.

In all likelihood, Wisconsin could take steps to counter a ruling only on pre-existing health conditions with minimal disruption to the market — provided the other provisions in the Affordable Care Act remain in place.

What happens if the Affordable Care Act  is declared unconstitutional?

That’s when things would get messy.

To start, without the safeguards in the Affordable Care Act, insurers would have multiple ways to avoid covering people with pre-existing health conditions, even if required to sell them insurance.

If a health insurer didn’t want to attract people with high medical costs, for instance, it could exclude expensive specialty drugs from its benefits or not cover drugs at all, said Cathy Mahaffey, chief executive officer of Common Ground Healthcare Cooperative.

“Everyone is welcome,” she said, “but you won’t necessarily have the coverage that you’ll need for your pre-existing condition.”

To ensure that people with pre-existing health conditions have access to insurance, Mahaffey said, the state would have to mandate that health insurers cover certain benefits.

It also would have to impose limits on annual and lifetime out-of-pocket expenses similar to those in the Affordable Care Act.

Has the governor proposed covering people with pre-existing conditions?

The governor has said he supports the provisions in a bill passed by the Assembly in the last session that would bar insurers from denying coverage or charging higher rates because of health status.

The bill doesn't impose caps on annual or lifetime out-of-pocket expenses or require insurers to cover specific benefits.

But, again, state law requires health insurers to provide basic health services, though prescription drugs, including specialty drugs that can cost tens of thousands of dollars a year, are excluded.

Couldn’t the state just bring back the Health Insurance Risk-Sharing Plan, commonly known as HIRSP?

HIRSP, which covered people with pre-existing health conditions before the Affordable Care Act, was one of the largest and most successful so-called high-risk pools in the country. But at its peak it covered only an estimated 24,000 people, and those were people who could afford health insurance.

“It didn’t begin to catch all the people who needed it,” said Pollitz of the Kaiser Family Foundation.

Mahaffey echoed Pollitz's assessment.

“If you bring HIRSP back, it may help a small segment of the population,” she said, “but nowhere near what the Affordable Care Act is serving.”

Roughly 176,000 people in the state, the vast majority of them in low-wage jobs, were receiving federal subsidies as of February to help offset the cost of insurance.

Many of them have pre-existing health conditions and could not afford health insurance on their own before the Affordable Care Act.

How would they get health insurance if the Affordable Care Act were declared unconstitutional?

Walker has not said what steps would be taken to ensure they would have coverage.

HIRSP also had a cost. It was funded by a tax on health insurance sold in Wisconsin. And health systems, physicians and other health care providers were paid rates slightly above those for Medicare but much lower than those paid by commercial insurers.

The cost would be much higher if the state were to ensure that everyone with pre-existing health conditions — including those now receiving federal subsidies — had access to health insurance.

Whether the Legislature would be willing to replace the federal subsidies and how much it would cost are not known.

The potential loss of the federal subsidies — as well as the required benefits — is what concerns Barbara Beckert, the director of the Milwaukee office of Disability Rights Wisconsin.

“It would have tremendous human cost,” she said.

Who would benefit from the dissolution of the Affordable Care Act? 

Rates would go down for a lot of people if the Affordable Care Act went away, said Karen Bender, an actuary with Snowway Actuarial and Healthcare Consulting in Little Suamico, near Green Bay.

“And for some of them, it would go down significantly,” she said.

Premiums for health insurance sold directly to individuals and families have soared under the law — in part because of the cost of covering people with high medical bills.

The increase has made health insurance unaffordable for thousands of people in the state who are not eligible for federal subsidies.

That said, the cost of covering people with pre-existing health conditions wouldn’t go away if the lawsuit against the Affordable Care Act is successful.

Why do the provisions in the Affordable Care Act on pre-existing conditions draw much more attention than other parts of the law, such as the overall expansion in coverage?

Before the law, health insurers could deny coverage or charge higher rates for medical conditions as common as high blood pressure, diabetes and depression.

They also could sell health insurance to someone but exclude coverage for a pre-existing condition.

The Kaiser Family Foundation estimates that 852,000 people in Wisconsin have a medical condition that could prevent them from buying health insurance if the Affordable Care Act were suspended.

Most people under 65 — more than 150 million people nationally — get health insurance through an employer. But they also know they could be forced to buy insurance on their own if they lost or left their jobs. 

“Insurance is kind of like a game of musical chairs,” Pollitz said, “and we move around in our lives.” 

Before the protections in the Affordable Care Act, the problem was what happened when the music stopped, she said. 

“If you lost your coverage,” she said, “there was no chair for you.” 

This story was updated to include additional information from the Office of the Commissioner of Insurance and the governor's office.