A friend posted a comment to my prior blog, and I have undertaken a reply…  In that response, he cited some information from Guy Benson, and while I obviously don’t know exactly where he got the information, I was able to locate at an article in which Mr. Benson makes those (or at least parallel) comments.  That article can be found at the conservative Townhall site.¹  While it may not be his exact source, it seems to cover the points cited rather well.  I will address my concerns about other key provisions in later posts, and confine my comments here are only in response to the topic of preexisting conditions.  Mr. Benson states that there are four layers of protection for those with pre-existing conditions, which are, quoting from Mr. Benson’s article cited above:

1. “Layer One: Insurers are required to sell plans to all comers, including those with pre-existing conditions. This is known as “guaranteed issue,” and it’s mandated in the AHCA. No exceptions, no waivers. I spoke with an informed conservative news consumer earlier who was stunned to learn that this was the case, having been subjected to 24 hours of unhinged rhetoric from the Left.
2. Layer Two: Anyone with a pre-existing condition and who lives in a state that does not seek an optional waiver from the AHCA’s (and Obamacare’s) “community rating” regulation cannot be charged more than other people for a new plan when they seek to purchase one — which, as established above, insurers are also required to sell them.
3. Layer Three: Anyone who is insured and remains continuously insured cannot be dropped from their plan due to a pre-existing condition, and cannot be charged more after developing one. So if you’ve been covered, then you change jobs or want to switch plans, carriers must sell you the plan of your choice at the same price point as everyone else. Regardless of your health status. This is true of people in non-waiver and waiver states alike.
4. Layer Four: If you are uninsured and have a pre-existing condition and live in a state that pursued (and obtained after jumping through hoops) a “community rating” waiver, your state is required to give you access to a “high risk pool” fund to help you pay for higher premiums. The AHCA earmarks nearly $130 billion for these sorts of patient stability funds over ten years.”

My comments are as follows:

Layer One:  This is correct on its face, but the analysis simply doesn’t go far enough.  States that do not seek a waiver must offer the plans on essentially the same basis as before, and pre-existing coverage would continue for anyone currently insured.  Contrary to the assertion made, however, the McArthur amendment does not prohibit insurers from charging more for people with pre-existing conditions. The potentially enormous difference between “required to sell” (i.e, availability) and “required to sell at an affordable price” (i.e., affordability) is the key. Consider the case of a $250,000 Ferrari.  I want one.  That doesn’t mean I can afford one, which probably explains why I don’t own that Ferrari.  See the difference between availability and affordability?  On a serious note, however, if a participant insurer under the AHCA proposal charges those with pre-existing conditions 500% of the current standard rate, premiums for a single wage-earner of, say, 55 years old could soar to over $2,000 per month for the most basic plan. I recently obtained rough estimates of cost under the current ACA for a 55-year old single male.  Bronze plan coverage (which covers roughly 60% of cost) averaged $436.20 over five plans, while Silver averaged $589.40, Gold averaged $677.20 and Platinum averaged a bit over $775.40.  Multiply those times five and tell me if you think an average wage earner could afford $2,947 a month for insurance for the Silver plan?  That is more than half of that person’s gross earned income (assuming a $60,000 per year salary/wages). And this is for the 2nd from the least expensive plan.  Why 500% you ask?  That is the ratio that the AHCA permits.  How benevolent do you think YOUR insurer will be?  Do you seriously think they will charge less than the allowable maximum?  If you do, I have heard of a great deal on a unique and decorative transportation option spanning the East River in New York…  Maybe my analogy to the Ferrari isn’t so far fetched after all.  Please note that these estimates are imprecise.

Layer Two:  The arguments raised above against the Layer One “protections” apply equally here, but it is important to note that age-based rating (vested with each State under the AHCA) could result in either higher or lower actual premiums than the example cited above.  Under the AHCA, each State can now set its own age-based rating method, those methods are no longer subject to regulation.³   That means that the estimated costs I am citing may well be conservative.  What it is almost certainly likely to do is result in a patchwork quilt of coverage, where each States could have potentially quite different health care coverage than its neighbor, a situation further complicated if your State has a large community along its border (think Chicago and Gary, or the two Kansas City communities, for example).  The potential for gross inequality is only increased by allowing individual States to waive the community rating provisions.  That uncertainty is likely to only make the worse, with some carriers pulling out of some states and not others, and creating a constantly shifting mosaic of uneven and uncertain coverage.

Layer Three:  Setting aside the affordability issues, the protections afforded under the AHCA for pre-existing condition coverage depend on continuous coverage.  We know that about 23% of the roughly 21.1 million people with a gap in coverage during 2015 had some form of pre-existing condition that would render them uninsurable or subject to the increased costs allowed under the AHCA.⁴   That is about 6.3 million people who we can predict, with some certainty, will be directly and negatively impacted by these changes, along with some unknown additional number whose pre-existing conditions would not have precluded coverage pre-Obamacare, but which could potentially trigger increases in cost under the AHCA.  Gaps in coverage can occur for many reasons, including loss of eligibility under someone else’s plan (divorce, death of a spouse, aging out at 26, etc.), as well as due to loss of employment, lack of knowledge about the need or methodologies of obtaining coverage, or errant yet simple youthful assumptions about one’s own immortality and invulnerability.  Under the AHCA, the un-affordability of premiums in the Waiver States becomes yet another factor to add to this list.  The 23 million ADDITIONAL uninsured that the AHCA will throw into this mix essentially doubles the population of those left behind, creating a substantial uninsured “underclass” that will continue to burden society and to drive up unfunded health care costs.  This is exactly what the ACA was intended to stop, flaws and all.

Layer Four:  Throwing those with health problems into high-risk pools is deeply problematic.  We know this from experience and have good data from the results of the High-Risk Pools under the ACA.  An excellent analysis by Jean P.  Hall of the Commonwealth Fund (drawing on data from the Kaiser Family Foundation) of the problems associated with that approach demonstrates that High-Risk Pools can increase costs significantly.⁵ This is especially true for anyone earning less than 400% of the federal poverty level, i.e., the neediest among us.⁶  The Kaiser Family Foundation has an article discussing this problem, among others, and concluded that these programs are potentially problematic.  Further, the assertion that the high-risk pool under the AHCA could be modeled after “successful” pools operated pre-ACA has flaws.  Many of those State pools had exclusions for pre-existing conditions, and they reached an average of about 2.2% of the population (the range was from 0.1% in Alabama to 10.2% in Minnesota)⁷

These points My friend are all accurate, but they do not convey a complete picture of the potential impact of the changes to pre-existing conditions contemplated under the AHCA.  What they miss, as I have pointed out above, is the terrible impact this proposal would have on those least able to defend or protect themselves.  That is not how the America I grew up in acts.  I was raised to think of Americans as protectors of the weak, not their tormentors.

As always, your thoughtful responses are most welcome, either in rep here or to my email at dbdolnick@gmail.com.  Thank you.

Footnotes

1. https://townhall.com/tipsheet/guybenson/2017/05/05/the-left-cant-stop-lying-about-republicans-healthcare-bill-n2322786.  This article also contains a link to a commentary/article at National Review posted by Ramesh Ponnuru, which offered similar comments (http://www.nationalreview.com/corner/447201/republican-healthcare-preexisting-conditions-waivers-misunderstood-moderates).  Both accessed last on May 20, 2017, at approximately 9:05 am.  

2. http://kff.org/interactive/proposals-to-replace-the-affordable-care-act/ (accessed 27 May 2017 at 5:33 pm)

3. ibid

4. http://kff.org/health-reform/issue-brief/gaps-in-coverage-among-people-with-pre-existing-conditions/?utm_campaign=KFF-2017-May-Pre-Ex-AHCA-Coverage-Gap&utm_medium=email&_hsenc=p2ANqtz-8M-vVBz0aleUGxL_h2T7SnKQKBOrdd8XOOM8bnplB0xNOPRjrDFG_Rhu9eGwh7H1Svj_tSyJ9jZU3S2mAxGBgKXCq9zAbTIsKpszudOEufNsmaIDE&_hsmi=52007627&utm_content=52007627&utm_source=hs_email&hsCtaTracking=148c8fd6-8ba2-4f02-a508-45b17365a226%7C3ae33023-7ef1-44a9-a84c-b2a8d055e6bd

5. http://www.commonwealthfund.org/publications/blog/2015/feb/why-high-risk-pools-still-will-not-work

6. ibid

7. http://kff.org/health-reform/issue-brief/high-risk-pools-for-uninsurable-individuals/ 

Further Reading:

Health Insurance Coverage of the Total Population at http://kff.org/other/state-indicator/total-population/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D

Sources of Health Insurance and Characteristics of the Uninsured 2012 https://www.ebri.org/pdf/briefspdf/EBRI_IB_09-2012_No376_Sources.pdf

Health Insurance Coverage for Americans with Pre-Existing Conditions:

The Impact of the Affordable Care Act – https://aspe.hhs.gov/system/files/pdf/255396/Pre-ExistingConditions.pdf

Realizing Health Reform’s Potential: Why a National High-Risk Insurance Pool Is Not a Workable Alternative to the Marketplace summary of the problems with High Risk Pools – http://www.commonwealthfund.org/publications/issue-briefs/2014/dec/national-high-risk-insurance-pool.  The full report, Why a National High-Risk Insurance Pool Is Not a Workable Alternative to the Marketplace, is at http://www.commonwealthfund.org/~/media/files/publications/issue-brief/2014/dec/1792_hall_highrisk_pools.pdf?la=en – both accessed May 20 and 21, 2017.

http://www.politifact.com/florida/article/2017/apr/28/politifacts-guide-gop-amendment-health-care-bill/

http://kff.org/interactive/proposals-to-replace-the-affordable-care-act/ 

In 2009, almost one in five Americans did not have health care coverage in any form.^[1] By 2015, that number had been cut almost in half. ^[2]  Regardless of your opinion on “socialized medicine”, most rational commentators agree that providing health care to our people is better than not doing so.  Providing adequate health care isn’t altruistic.  Think about it, none of us lives in a bubble. Most of us interact with others throughout the day, with co-workers if nobody else, or with waiters, cab drivers, gardeners, and retail clerks.  Maybe you interact with your yoga instructor.  If those people are ill while working, your exposure increases.  Infectious disease does not respect societal limits or boundaries.  In a medical crisis, the costs for treating an emergency are likely to be either:

• uncollectible and unpaid (and then re-distributed via increased billings and costs to those of us who do have coverage), or

• borne by society as a whole through Medicaid or other social welfare systems (and redistributed to all of us via increased taxation).

Even those who can afford to pay some portions of such emergency care out-of-pocket can be saddled by enormous debt.  Medical expenses are a major cause of bankruptcies.^{[3] [4]} 

These are only statistics, and they tell only part of the story. I want to tell you other parts, the respective tales of two friends. Both of them are productive and hard-working people, the kind of people you want living next door. One, at the time his crisis began, was employed. One was not. What happens with their  situations, however, may not quite be what you might expect

Let’s start with “Bob” (not his real name) who is in his mid-40s, and lives in Southern California. I’ve known “Bob” for about seven or eight years.  He works a variety of jobs to make ends meet, and spends a significant amount of his time hustling to get more work. He is a DJ, Karaoke Host, MC, and whatever else he can do to try and make ends meet. He is fit, athletic, intelligent, and, in my humble opinion, a fine human being on all fronts. Like me, “Bob” is pretty progressive politically. He was in favor of universal health care, or, at a minimum, universal health insurance.  “Bob” was quiet, respectful, and a polite advocate for social justice. He was also very healthy, or so we thought.

A week before I started writing this piece, “Bob” suffered a massive stroke. His girlfriend found him at home, unresponsive and unable to move or communicate. He spent five days in intensive care, and as I write this, is now in a hospital room, and not doing too well. They have weaned him off the ventilator, but he is unable to swallow or speak.  At present, he is being fed through a tube.  He is not able to move too much on his own yet, but we just don’t know how much impairment that he will sustain going forward.  It could be profound.  His recovery won’t take mere weeks, it is most likely to take a very long time.  Because he works several jobs, each less than full time, “Bob” had no employer-provided health insurance.  His earnings were not high over the past couple of years, despite working pretty close to full time.  Despite roughly full-time employment, “Bob” had no health insurance.  I doubt that he could afford it.

Now, in the midst of his medical crisis, California’s version of Medicaid (Medi-Cal) is being brought in.  The cost for his care to date is already likely to be well over $200,000, and it won’t get any cheaper. “Bob” can’t pay for that kind of care. He may not be able to hold gainful employment again for a very long time. We don’t know the extent of the damage this stroke has done, or how well he might be able to respond to it.  We don’t know how much function he will recover. His only options going forward are to hope that Medi-Cal covers his expenses.  His friends are trying to raise enough to cover any shortfall.  If those don’t cover things, he may need to file for bankruptcy.

Some estimates opine that 60% of all bankruptcies in America are related to or caused by medical expenses.[5]  That number is problematic, but other estimates range from 29% to 57%.[6]  Whatever number you choose, that’s hundreds of thousands of people thrown into financial distress to pay for their medical care.  For “Bob”, the realities of America’s failure to provide universal health insurance are not theoretical or abstract. They are real, they are imminent.  They are dreadful and terrifying at a time when neither he nor his family should need to worry about such things. The cost of “Bob’s” care will now fall on society as a whole, on all of us, through one mechanism or another.  The harsh reality is that no amount of political wrangling over ideologies will pay “Bob’s” bills. That requires cash.

Now the tale of the other friend, as promised. Frank (his real name, used with permission) is in his late 50’s and lives in Illinois. I’ve known him for the better part of 20 years. He is conservative politically and was not, until recently, a supporter of Obamacare. I’m not sure that he is, even now.  Frank has held professional level jobs throughout his career.  He was laid off from an upper management position in the Mid-West about two years ago. He hasn’t been able to find a steady job since then. Laws against age discrimination notwithstanding, nobody wants to hire an old man.  That is especially true if that person has a bad back, which Frank does. He has severe spinal stenosis.  One surgery was performed some years ago, with mixed results. His COBRA coverage ran out, and Frank turned to the Health Insurance Exchange. Unfortunately, His medical situation deteriorated.  Further surgery was needed to prevent paralysis and cure his debilitating pain.  Frank was barely able to walk, and couldn’t sit or stand for more than brief periods without extreme pain. The second surgery, I am happy to report, appears to have helped a lot.  Frank has much improved, with less pain and better function and feeling in his legs. We are both optimistic.

Frank and I corresponded just before the debate and defeat of the Republican ‘repeal and replace’ attack on the PPACA.  He said, in his email, “We are among those that [sic] will be severely hurt if this bill passes.  We are humans.  This bill has become political.  The effect on people is an afterthought.  We are on “Obamacare”.  It is not perfect.  But without it, I would be paralyzed with pain and no recourse.”

He goes on to state, “We are not getting anything free under Obamacare.  We have a huge deductible, we had to change doctors and hospitals, many prescriptions are not covered, BUT I was able to get necessary medical services and should be able to walk again. .. Obamacare is not perfect.  Maybe improve it?  The new act will cost [sic]  me to lose coverage.  If it is enacted, I am supposed to pay for it with a very small tax credit.  I am unemployed so have no income to be taxed ????  Really?”

There is a tragedy in both these stories that angers me. What no politician has been able to explain to me to date is why these scenarios exist in America. Why can we not provide even the most basic health insurance coverage to our citizens?  Set. aside for the moment the questions of healthcare itself.  Universal coverage for healthcare leaves the existing model of for-profit medicine alone.  To me, there is a difference between universal coverage and universal health care.  Dealing with the coverage questions address only how you pay for the care under our present system.  We, in the United States, do a pretty mediocre job of handling that transaction.

For example, we are a member of the Organization for Economic Cooperation and Development.  Among the 34 countries in that organization, the US ranks number 33 in providing coverage for health care. We did beat out Chile, but that’s it. Thirty-two other countries do a better job than the US at providing health care coverage.  That’s embarrassing, and it’s appalling.  That it has improved under Obamacare is telling as well.  We have a mess on our hands, and we should be ashamed of it.  Instead of political wrangling, we ought to be ashamed enough to do something to fix the problem.

Now, before someone jumps up and accuses me of advocating for socialized medicine, take a deep breath and let’s get some definitions straight. “Socialized Medicine” is where the provision of medical care itself works under a socialist economic model. Obamacare isn’t socialized medicine. Obamacare changed some things about how we pay for medical care and set some minimum standards for insurance policies.  Obamacare required coverage for more people under those policies.  It required the policies to pay for preventive services.  It mandated coverage for pre-existing conditions.  It did not change who owned your clinic or your hospital.  It did not change employed your physician, or who owned the pharmacy you used.  It did not change the capitalistic medicine-for-profit model we use here.  It did not nationalize the insurance industry, pharmaceutical industry,  or the medical industry. So if that was your argument, you’re erecting a strawman fallacy.  Get over it, knock it off, and stop distracting from real problems that need real solutions. This isn’t just about ideology, this is really about people’s lives.  This is about my friends, and they deserve a great deal more respect than that.

NOTES:

1.  OECD (2017), “Social protection”, OECD Health Statistics (database). DOI: http://dx.doi.org/10.1787/data-00544-en (Accessed on 08 April 2017)

2.  ibid.

3.  http://www.huffingtonpost.com/simple-thrifty-living/top-10-reasons-people-go-_b_6887642.html

4.  David U. Himmelstein, Elizabeth Warren, Deborah Thorne and Steffie Woolhandler MarketWatch: Illness And Injury As Contributors To Bankruptcy; Health Affairs published onlineFebruary 2, 2005; doi: 10.1377/hlthaff.w5.63 (Accessed on 08 April 2017 at http://content.healthaffairs.org/content/suppl/2005/01/28/hlthaff.w5.63.DC1)

5.  Himmelstein ( op cit) and The Huffington Post, 24 March 2015, at http://www.huffingtonpost.com/simple-thrifty-living/top-10-reasons-people-go-_b_6887642.html (accessed 9 April 2017)

6.  LaCapria, Kim; “Money, Cash, Throes”; snopes.com 22 April 2016 at http://www.snopes.com/643000-bankruptcies-in-the-u-s-every-year-due-to-medical-bills/ (accessed 9 April 2017).