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Obamacare's 2nd Birthday: Help for Those with Pre-Existing Conditions?

Posted By Alyene Senger On March 23, 2012 @ 3:30 pm In Obamacare | Comments Disabled

This week, Obamacare will have its second birthday, but there’s little reason to celebrate. Throughout the week, Obamacare advocates [1] have emphasized the law’s supposed benefits on specific groups of Americans, but as Heritage’s research over the past two years has shown, Obamacare harms Americans—even the groups showcased by the left.

Today, the focus is on Obamacare’s extension of coverage to those with pre-existing conditions. Advocates argue that the expensive health law was necessary to meet the needs of this population, but far fewer Americans have taken advantage of new programs than expected so far, suggesting the problem may have been overstated. Meanwhile, costs have grown well above what was expected.

Already a Failure

Obamacare created high-risk pools, called the Pre-Existing Condition Insurance Plan, to provide coverage to people with pre-existing conditions before 2014, when insurance companies will be prohibited from excluding anyone on this basis.

The high-risk pools already seem to be failing, as their enrollment remains very low.

It was predicted that 375,000 Americans would enroll in the program. As of February 2011, only 12,500 people had enrolled, and a year later, a new report [2] shows that just 49,000 had enrolled. And this was after eligibility requirements were broadened to include more people.

Higher Costs

Despite enrollment of just 13 percent of the projected number, the high-risk pools may still exhaust their appropriated $5 billion before 2014. While the very nature of a high-risk pool incurs higher per-person costs due to covering those that are already sick, according to an Administration report [2], the cost per person of the program is 2.5 times higher than expected. This shows that the cost of covering the uninsured in the new exchanges will likely be much more expensive than anticipated in 2014, when the rest of the law goes into effect.

Solving the Problem a Better Way

It’s become clear that the White House and other advocates of Obamacare overemphasized the needs of those with pre-existing conditions to win support for the law. Heritage expert Ed Haislmaier says [3] that “the problem was nowhere near as big as portrayed, and the solution doesn’t require 2,700 pages of legislation or $1 trillion in new government spending.”

Instead, Haislmaier explains that before Obamacare’s passage, insurers were already prohibited from excluding those with pre-existing conditions in the group market. Exclusions only apply to those without prior coverage or those who waited until they were sick to enroll in their employers’ plans.

These reasonable rules don’t apply to the individual market, which is about 9.4 percent of the total market for private health insurance. According to Haislmaier [3], “an individual can have purchased non-group health insurance for many years, and still be denied coverage or face pre-existing-condition exclusions when he or she needs or wants to pick a different plan.”

To solve this particular problem in the health care system, the rules governing the group market could have simply been applied to the individual market. Instead, the left passed a sweeping health care overhaul with an exorbitant price tag. The temporary Obamacare fix for those with chronic illness will cost taxpayers more than expected, but it still won’t come close to serving the number of Americans promised. This is just one example of many ways [4] in which the law is proving to be more expensive, but less effective, than promised.

To learn about a better direction for reform, read Heritage’s reform proposal, Saving the American Dream [5].


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2012/03/23/obamacares-2nd-birthday-help-for-those-with-pre-existing-conditions/

URLs in this post:

[1] Obamacare advocates: http://blog.heritage.org../2012/03/13/strategy-memo-details-liberal-pr-plan-to-promote-obamacare

[2] a new report: http://www.cciio.cms.gov/resources/files/Files2/02242012/pcip-annual-report.pdf

[3] Heritage expert Ed Haislmaier says: http://blog.heritage.org../2010/09/22/the-right-way-to-limit-pre-existing-condition-exclusions/

[4] many ways: http://www.heritage.org/research/reports/2012/03/the-obamacare-two-year-checkup-more-reasons-for-repeal

[5] Saving the American Dream: http://www.heritage.org/research/reports/2011/05/saving-the-american-dream-the-heritage-plan-to-fix-the-debt-cut-spending-and-restore-prosperity

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