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Radar On Market Access: If Preexisting Condition Protections Vanish, Health Insurers Probably Won't Cheer

Posted by Leslie Small on Oct 6, 2020


Since at least the 2017 saga when Republicans tried to repeal and replace the Affordable Care Act (ACA), one of the law’s most visible — and politically charged — components has become its protections for people with preexisting conditions. Now, with the makeup of the Supreme Court slated to shift, some experts believe those same provisions are the most at risk from being struck down alongside the law's now-defunct individual mandate, AIS Health reported.

But that begs the question: Would health insurers actually want to go back to a pre-ACA world?

"No, they so do not want that to happen," says Chris Sloan, an associate principal at Avalere Health. Before the ACA was enacted, "it wasn't that they [insurers] liked medically underwriting…it's just that anybody who didn't would get all the bad risk and their health plan would collapse," Sloan explains.

Katie Keith, a health care attorney and faculty member at Georgetown University's Center on Health Insurance Reforms, says that companies that are already underwriting short-term, limited-duration plans "could jump right in" and underwrite more plans if parts of the ACA are struck down. But other insurers might not even have the infrastructure to do so anymore, having given up their underwriting divisions after the ACA was enacted, she observes.

About 54 million people currently have a preexisting condition that could have resulted in them being denied coverage in the pre-ACA individual market, according to a new analysis from the Kaiser Family Foundation. The ACA required insurers in the non-group, small-group and large-group markets to issue coverage regardless of health status and prohibited non-group and small-group plans from varying premiums based on health status or gender, among other protections for preexisting conditions.

In Sloan's view, insurers would prefer to keep operating in a post-underwriting world mainly because "they like that everybody plays by the same rules across the markets" so that they can compete more fairly.

Sloan also points out that "disruption is challenging — I mean, just think about how long it took to get the ACA and the individual markets to a sort of stable place." Therefore, insurers "above all else value stability in markets, and in particular, stability when it comes to rules and regulations," he adds.

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Topics: Industry Trends, Payer