• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • HHS Report on Obamacare’s Preexisting Conditions Impact: Say What???

    On the eve of the scheduled vote in the U.S. House of Representatives on a bill to repeal Obamacare, the Department of Health and Human Services (HHS) issued a report yesterday entitled: “At Risk: Pre-Existing Conditions Could Affect 1 in 2 Americans: 129 Million People Could Be Denied Affordable Coverage Without Health Reform.

    The report’s “findings” are misleading and wildly inaccurate.

    The report implies that without Obamacare’s prohibition on insurers applying preexisting-condition exclusions, nearly half of the entire U.S. population would be at risk of being denied health insurance because they already have a preexisting medical condition.

    But claiming that, because millions of people have preexisting medical conditions today, they risk being denied coverage if Congress repeals Obamacare is like saying that, because millions of Americans live within five miles of the seacoast, they risk being killed by the next hurricane if Congress cuts funding for the Army Corps of Engineers. Such simplistic and superficial methodologies deliberately ignore all the other relevant factors that might lead a reasonable person to question their outlandish conclusions.

    In the case of hurricanes, costal communities have emergency preparedness plans, evacuation routes, and shelters designed to withstand hurricanes—all of which make the probability of anyone being killed by a hurricane vastly lower than some scary estimate of potential casualties derived by simply counting the number of individuals living near the seacoast.

    In the same way, when it comes to individuals being denied health insurance coverage based on a preexisting medical condition, the HHS report vastly overstates the effect of repealing Obamacare because, implicitly, it vastly overstates the benefit of enacting Obamacare. Put another way, if the report’s assertion that over 100 million Americans with preexisting medical conditions risk being denied coverage if Obamacare is repealed, then why weren’t 100 million American’s with preexisting medical conditions denied coverage, say, five years ago, before Obamacare was enacted?

    The truth is that if Obamacare were repealed, very few Americans would be at risk of being denied health insurance because of a preexisting medical condition for the same reason that very few individuals face such a risk today. The reason is that laws enacted years ago already protect those individuals, and those laws would still exist if Obamacare were repealed.

    Today, over 90 percent of Americans with private health insurance are covered by employer group plans where existing rules governing the application of preexisting condition exclusions are not an issue. Before passage of Obamacare, the law specified that individuals with employer-sponsored insurance cannot be denied new coverage, be subjected to preexisting condition exclusions, or be charged higher premiums because of their health status when switching to different coverage. Thus, in the employer group market, preexisting condition exclusions apply only to those without prior coverage or those who wait until they need medical care to enroll in their employer’s plan.

    Those existing rules represent a fair approach: Individuals who do the right thing (getting and keeping coverage) are rewarded; individuals who do the wrong thing (waiting until they are sick to buy coverage) are penalized.

    The one small, legitimate remaining problem is that the same kinds of rules do not currently apply to the “individual” (non-group) market—about 9.4 percent of the total market for private health insurance. Thus, an individual can have purchased non-group health insurance for many years and still be denied coverage or face preexisting-condition exclusions when he or she needs or wants to pick a different plan.

    The obvious, modest, and sensible reform is to simply apply to the individual health insurance market a set of rules similar to the ones that already govern the employer group market.

    Instead, Obamacare prohibits the application of preexisting-condition exclusions under any circumstances, thus encouraging everyone to wait until they are sick before buying health insurance. That perverse incentive is a recipe for disaster. So, in order to limit the effects of that disaster (of their own making), Congress then included in Obamacare an unpopular individual mandate to buy health insurance.

    Indeed, as John Goodman of the National Center for Policy Analysis notes, if preexisting-condition exclusions are such a huge problem, then why have only 8,000 people nationwide so far signed up for the new high-risk pools included in Obamacare to provide coverage to those denied insurance until the new rules take effect in 2014?

    The truth is that the issue of preexisting-condition exclusions is yet another example in Obamacare where Congress focused on a small (though legitimate) problem with the current health system and, rather than enacting a modest and sensible solution, instead used the problem to justify an ideologically motivated, sweeping, and disruptive policy change that creates new and bigger problems than the one Congress claimed to be solving.

    This latest report from HHS should be seen for what it really is: a wild and desperate last-ditch attempt to defend an indefensible policy.

    Posted in Obamacare, Ongoing Priorities [slideshow_deploy]

    18 Responses to HHS Report on Obamacare’s Preexisting Conditions Impact: Say What???

    1. RightGuy says:

      The lies and scams from Team Obama know no bounds.

    2. Granite Sentry, Midw says:

      Sometimes you just have to say, "Does this really seem likely?" No. It's a carefully constructed statistic specifically launched to gin up panic in the streets at the prospect of altering Obamacare. Everyone please get out your paper bags and pant into them for a bit, pare down that blood oxygen level.

      Meanwhile, check a post on http://www.granitesentry.com about the president's new Accountable Care Organizations. You may need your paper bag again.

    3. the allist, everywhe says:

      their tactics are bad, but their hearts are in the right place. for the people. not just some of them.

      although moderation is key and balance is what should be striven for. the reactionary stance of the bill should be addressed.

    4. West Texan says:

      Good hurricane analogy. Social progressives continue to exploit people's worst fears while purposely hiding the facts. Health care and its associated market reforms are states' business under the tenth amendment. Such power was never delegated to the federal government.

      Texas does offer high risk coverage to uninsurable conditions. And non-discriminatory group plans are available through organizations besides employers. If states choose to form a compact among themselves to improve access and services, all they need is approval from the U.S. House.

    5. West Texan says:

      PS: We use to have a U.S. Congress until passage of the 17th Amendment in 1913. What we've been operating with since that time is an extended House.

    6. Bobbie says:

      It's a fear mongering stipulation. If the president doesn't get what the president wants, he'll punish and throw threats into it. I've had a preexisting condition since 1977. As a young child, MY PARENTS PROVIDED for me under my father's INSURANCE! Upon reaching 18, i found a job with INSURANCE! NEITHER my father's insurance NOR my own, was i denied! So i see this to be by government design! I'm not saying my life doesn't go without issues, but that's what MY life, the one I OWN, leaves ME to deal with! This is being purposely done by a spoiled, dangerous brat!

    7. Octavio, Texas says:

      The article goes to the crux of the problem. If the pre-existing conditions were so high, how come there are not more than 100 million people uninsured? Fear-mongering at its best.

    8. Bobbie says:

      I apologize, Mr. Haislmaier. I wrote out of line. Could you please delete everything past the word "done" in my comment and this one? Thank you, kindly.

    9. delmar windhorst, Ed says:

      God has granted me a healthy, happy life. Having been hospitalized twice in my life (once in 1949 for two days with a cold and once in 2007 for forty hours with

      pneumonia, at age 80 and 38 days I cancelled my Medicare coverage. Why

      bother. Obamacare exceeds constitutional muster and is the dream of a con-

      artist from Chicago. He needs to return there as a common peon like so many of

      us with his bag of goodies and shut up.

    10. Jeff - Tampa says:

      Although the facts are an "inconvenient truth" that the Socialists prefer to avoid at all costs, in 2010 there were 8,000 Americans that had problems getting coverage based on Pre-existing Conditions. I think we could figure out a way to deal with that short of Socializing the entire Healthcare system. Democrats could care less about your Healthcare, but they love the idea of total control and power over your life.

    11. John Detwiler says:

      It is getting so bad that anything a government agency says can be interpreted as astatistical lie. Every time you check the record and facts, you find that they eccentuate the facts up or down to fit their hypothesis. The old addage of believe nothing that you read applies here. I have one sincere desire, and that is to see the constitutionaly flawed Obama care repealed in it's entirety. Their is truly nothing in the bill that is needed by the populace.

    12. Erik Osbun says:

      True, but why then did the authors of the "law" gut Medicare? The answer is that Obamacare is about CONTROL, not health care.

    13. Sarah/ Atlanta Ga says:

      Why don't the 1 out of 2 people already have medical insurance. When I was a child, 60 years ago, medical insurance paid for my tonsils to be removed, so most of these people had an opportunity to get medical insurance before they got their preexisting condiition. We have to pay consequences when we use our money for less important things. Hundreds of minutes on cell phones, booze, drugs etc,etc.. Anyway, How many years has medicare paid for people without medical insurance. It is amazing to me how people make up statistics and just plain lie to try to prove their point. Do they think everyone in the US is that naive?

    14. Pingback: Sick Healthcare Information « The World Upside Down

    15. Pingback: Tweets that mention The Foundry: Conservative Policy News. -- Topsy.com

    16. Bobbie says:

      The truth is health care, private or government should be better today then it was in 1977. The government moved their way into private insurance promising to make it better, but the more they infiltrated the worse and more corrupt private and public health care has become. If private insurance was without government influence, the private industry would be much better today and will be much better the day after the government's deceivingly "affordable health care act" is eliminated…

    17. justlooking says:

      I heard from a friend that he attempted to get insurance for their schoolkid who had bad knees. He was told that ObamaCare prohibited them from denying issuing them a policy based on those preexisting conditions but they could exclude the knees from that policy.

    18. Julie says:

      Notice that most of the comments are both negative and written by men.

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.