Recently introduced federal legislation would bar insurers from refusing to
cover people who have preexisting conditions, a protection missing from some
health care reform proposals.
The timing of the proposed legislation may help raise the issue's profile
in Congress during the debate on national health care reform.
Companion versions of the Preexisting Condition Patient Protection Act of
2009 (HR 1558 and S 623) were introduced in the House and Senate on March 17
to allow people with chronic and other preexisting health problems to obtain
insurance in the individual and employer-based markets.
According to Senate sponsor Jay Rockefeller (D-W.Va.), the legislation is
needed to protect the 133 million Americans with chronic illnesses from
coverage exclusions when they are most in need of medical care and the
insurance that makes it affordable. The use of preexisting-condition
exclusions is, at least partially, why 25 million Americans with such
conditions are underinsured, he said.
"Insurance companies should no longer be allowed to reap profits on
the backs of sick Americans," said Rockefeller, chair of the Senate
Finance Health Care Subcommittee, in a Senate floor statement.
Insurers use preexisting-condition exclusions to minimize adverse
selection—the enrollment of people with illnesses in a risk pool in
disproportionate numbers to their percent of the overall population. Insurers
maintain that such a financially unsustainable imbalance will occur if
preexisting-condition exclusions are lifted.
The legislation highlights an important priority for APA, said Lizbet
Boroughs, associate director of APA's Department of Government Relations. Many
people with chronic psychiatric illnesses are unable to find full-time work to
qualify for employer-based coverage and are then unable to find insurers that
will extend individual coverage to them. The result is frequently either a
financial spiral down as they attempt to pay out of pocket for medications or
other treatment or deterioration of their health as they forgo care.
The removal of barriers to health insurance coverage for people with
chronic health problems has not been emphasized by many congressional leaders
in the health reform debate, according to Boroughs. Some plans focus instead
on so-called insurable populations.
"People with preexisting conditions need to be part of the health
care debate," Boroughs said.
Coverage for people with preexisting conditions was among the points that
APA Medical Director James H. Scully Jr., M.D., and other physicians raised in
a March meeting with officials from the Obama administration (see
APA Participates in Obama Health
Reform Meeting). It's a point echoed by the bill's supporters.
"It is wrong and impractical to commit ourselves to health care
reform without addressing the faulty and ill-advised preexisting-condition
exclusion," said Rep. Joe Courtney (D-Conn.), sponsor of the House
version of the bill.
Advocates say the legislation would rectify a number of different
problematic issues faced by individuals who have a chronic illness or a
preexisting medical condition. For example, the fear of being blocked from
private insurance coverage can keep people with chronic and other preexisting
conditions tied to an undesirable job and prevent them from pursuing new
opportunities. The legislation would bar employer-based insurance plans from
the currently allowed practice of denying coverage for preexisting conditions,
such as chronic psychiatric illness, for up to 12 months to new employees who
have been without coverage for the preceding 63 days or more. This problem
would be addressed under the legislation by eliminating preexisting-condition
exclusions in all insurance markets.
The measure also would bar the practice of employers' examining medical
recommendations, diagnoses, and treatments that new employees received within
the most recent six months to determine when to deny health coverage for a
preexisting condition for up to 12 months.
Another area of coverage addressed by the legislation would provide buyers
in the individual market with protection against insurers'
preexisting-condition exclusions. Because the individual insurance market is
not based on a large pool of insured people, such exclusions have had their
largest impact there. People with chronic health conditions seeking insurance
in the individual market are likely to pay high deductibles, have large
monthly premiums, and even have the specific illness for which they need
coverage written out of their policies.
Although it was intended that the Health Insurance Portability and
Accountability Act of 1996 (HIPAA) would restrict private insurers from using
a preexisting-condition exclusion to limit health insurance coverage, it has
fallen short of the patient-protection expectations of its supporters.
"HIPAA has been successful, and many individuals have come to rely on
its protections," Rockefeller said. "However, after more than a
decade, certain gaps in HIPAA's protection have become apparent."
In contrast, the proposed legislation requires federal health officials to
track and report the extent to which the changes resulting from the proposed
law lead to adverse selection. The legislation also would add unprecedented
levels of scrutiny of the insurance industry, including mandatory collection
of data on the "characteristics" of private insurers' covered
populations to provide transparency on the true mix of patients and patient
claims among the companies.
The Government Accountability Office would be charged with reporting on
whether the measure reduces the number of uninsured and underinsured, as well
as what effect it has on the affordability of health insurance coverage.
Information on the Preexisting Condition Patient Protection Act of
2009 can be accessed at<www.thomas.loc.gov>
by searching on the bill numbers, HR 1558 and S 623. ▪