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A Project of The Annenberg Public Policy Center

What’s Romney’s Plan for Preexisting Conditions?

The Obama campaign has repeatedly said that Mitt Romney was wrong when he claimed at the first debate that “preexisting conditions are covered under my [health care] plan.” We mostly agree. Romney’s comments implied that he would keep the provisions of the Affordable Care Act that guarantee coverage for all, regardless of preexisting conditions. But the campaign has given different explanations for what Romney meant, saying at first that he would leave it to the states and then saying he would expand federal law for those with “continuous coverage.”

Federal law since 1996, under the Health Insurance Portability and Accountability Act, already requires insurance companies to nullify preexisting condition exclusions for those who had continuous coverage and were joining a group health plan at work. A campaign spokesman told us Romney would extend the federal HIPAA regulations to others “maintaining continuous coverage.” Those who buy insurance on their own do not get the same protections under HIPAA, so Romney could expand the regulations to cover them. The Romney campaign has not released specific details on exactly what he would do. His website only says that his plan will “[p]revent discrimination against individuals with pre-existing conditions who maintain continuous coverage.”

We’ll go through what the regulations currently are under HIPAA, what they’ll be starting in 2014 under the Affordable Care Act, and what the Romney campaign says he’ll do.

A Confusing Claim

At the first debate on Oct. 3, moderator Jim Lehrer asked Romney: “[I]f Obamacare is repealed. How would you replace it?” And Romney answered: “Well, actually it’s — it’s — it’s a lengthy description. But, number one, preexisting conditions are covered under my plan.”

Romney didn’t explain what he meant by that, but the implication was that his plan would do what the federal health care law does for those with preexisting conditions. But Romney aide and spokesman Eric Fehrnstrom later said that Romney’s plan would not.

Fehrnstrom told CNN on Oct. 4: “We will give the state initiatives and money so that they can manage these decisions on their own. But, of course, we’d like them to see them continue that pre-existing band [sic] for those who have continuous coverage.” He reiterated the idea that Romney was in favor of extending such protections, but he would leave it to the states. “The governor believes that those who have continuous coverage should not be dropped, if they change plans and have a preexisting condition. But states are well situated to manage these issues,” he said.

But when we contacted the Romney campaign, a spokesman told us that Romney would extend federal protections, saying that Romney “is proposing federal regulation via an extension of HIPAA for those maintaining continuous coverage.”

President Barack Obama and his campaign have pounced on the walk-back by Romney’s staff. Democratic National Committee Chairwoman Debbie Wasserman Schultz said in a fundraising email, “His campaign quietly admitted afterwards that, no, it is not, in fact, a part of his health care plan.” Wasserman Schultz, a breast cancer survivor, said Romney’s statement at the debate was “personally offensive.” And in another fundraising appeal, Vice President Joe Biden said that Romney “gets fact-checked by his own campaign on his health care plan.”

Obama said at a campaign stop that Romney had been “fact-checked by his own campaign” and that Romney’s advisers came out and said that his debate comments were “not true.” The Romney camp didn’t go that far. Fehrnstrom didn’t say his candidate was wrong, or that Romney didn’t have a plan for preexisting conditions. But it’s safe to say Fehrnstrom, and subsequently a campaign spokesman to FactCheck.org, gave a much different explanation of what Romney would do than the impression the candidate himself left at the debate.

And this is the second time Romney has given the wrong impression on this topic. In a Sept. 9 interview on “Meet the Press,” he told host David Gregory that there were “a number of things that I like in healthcare reform that I’m going to put in place,” mentioning preexisting conditions.

Gregory: On healthcare, you say that you would rescind the president’s healthcare plan on day one. Does that mean that you’re prepared to say to Americans, young adults and those with pre-existing conditions, that they would no longer be guaranteed healthcare?

Romney: Well, of course not. I say we’re going to replace Obamacare. And I’m replacing it with my own plan. And, you know, even in Massachusetts where I was governor, our plan there deals with pre-existing conditions and with young people. Everybody…

Gregory: So you’d keep that part of the federal plan?

Romney: Well, I’m not getting rid of all of healthcare reform. Of course, there are a number of things that I like in healthcare reform that I’m going to put in place. One is to make sure that those with pre-existing conditions can get coverage.

And later, the campaign clarified that Romney was only talking about those with “continuous coverage.” An aide told National Review: “Governor Romney will ensure that discrimination against individuals with preexisting conditions who maintain continuous coverage is prohibited.”

What’s on the Books Already

Since the 1996 HIPAA law, there have been protections in place for persons who have continuous coverage on employer-sponsored plans, and lesser protections for those moving from an employer plan to one on the individual market. There aren’t federal preexisting condition protections for those moving from an individual market plan to an individual market plan. And even for employer plans, if someone has a gap of more than 63 days with no health insurance, they can face temporarily exclusions for preexisting conditions.

That’s what’s meant by “continuous coverage” — a gap of no more than two months.

“Right now, before [the Affordable Care Act] in 2014 takes effect, the protections are pretty strong for people in employer-sponsored group health plans. And they’ve been that way since HIPAA in 1996,” says Karen Pollitz, senior fellow at the nonpartisan Kaiser Family Foundation, who was a staffer in the Obama administration’s Office of Consumer Information and Insurance Oversight. Kaiser put out a fact sheet on the various preexisting condition rules, and how some details can vary state to state. When we contacted an insurance industry trade group, we were also referred to Kaiser.

Employer plans can exclude preexisting conditions temporarily — for up to a year. But if a new employee has had continuous coverage previously — a gap, again, of no more than 63 days — they’re granted a waiver for that exclusion period, equal to the time they spent on the previous plan.

Let’s give an example to explain that: If you’ve been at your job for more than a year and switch jobs, with no gap in coverage, there’s no preexisting exclusion. You’ll be fully covered right off the bat. If you had had employer-sponsored insurance for only six months and change jobs, the new plan could refuse to cover your preexisting conditions for six months. If you leave or lose a job and go without coverage for more than two months, a new employer’s plan can’t refuse to cover you and can’t charge you more for any health issues. But the plan can exclude coverage for your preexisting conditions for up to a year.

As a result of those somewhat complicated rules, and the paperwork that comes with them, large group plans basically don’t have preexisting condition exclusion periods. “We stopped asking about it on the employer benefits survey,” Pollitz says. But small group plans might have such exclusion periods. And certain conditions can’t be excluded under HIPAA — pregnancy, for one, and coverage of newborns.

As for persons buying insurance on their own, “HIPAA also added some portability protections into the individual market but they’re not nearly as extensive,” Pollitz says. The rule is that if you had 18 months of continuous coverage, and exhausted your eligibility for COBRA — which allows individuals to stay on their previous employers’ plan if they pay the full premium, and the last day of that continuous coverage was on a group plan, an individual policy can’t turn you down and can’t exclude preexisting conditions. But you can be charged more than healthy individuals for that policy in most states; some states have instituted their own non-discrimination policies, saying everyone has to be charged the same amount.

As for those moving from a plan on the individual market to another individual market plan, there are no preexisting condition protections. The same goes for those who haven’t had coverage for a while and are trying to get a policy on their own. They can face preexisting exclusions, be charged more, and simply be denied coverage.

“It’s a hard place to kind of come and stay,” says Pollitz of the individual market, explaining that consumers tend to face affordability issues, both with paying the full premiums and out-of-pocket costs, and benefits tend to be less comprehensive than in group plans. “Most people come to the individual market for a brief period of time, usually when they’re between jobs.”

If they do go back to employer-sponsored coverage, they can’t be denied a plan, or charged more. And as long as they’ve had continuous coverage, their preexisting conditions can’t be excluded.

Obama’s Law and Romney’s Plan

The Affordable Care Act does away with all of those complicated rules and issues a blanket protection for those with preexisting conditions, whether they’ve had a gap in coverage or not, starting in 2014. “Nobody can be turned down, nobody can be charged more because of their health status, there can’t be any exclusions for preexisting conditions,” says Pollitz.

In exchange for requiring insurance companies to take all comers, regardless of health status, the law requires everyone to have coverage.

Romney and his campaign have indicated that the federal protections under HIPAA that he would extend would pertain to those without a gap in coverage of more than 63 days. In a September article in the New England Journal of Medicine, Romney said: “Regulation must prevent insurers from discriminating against people with preexisting conditions who maintain continuous coverage.” As for the uninsured, Romney wrote: “We will provide support for low-income Americans and those uninsured persons whose preexisting conditions push the cost of coverage too high for them to pay themselves.” But that “it is states — not Washington — that should lead this effort.”

We asked his campaign for more detail. Would Romney ban individual market plans from charging more for those with preexisting conditions — as employer plans are required under HIPAA? Or is he referring only to the portability aspect, that those with continuous coverage on the individual market couldn’t be denied coverage, or have their preexisting conditions excluded? We didn’t get an answer to those questions.

It’s unclear how many Americans with preexisting conditions lack continuous coverage, or how many will benefit from the Affordable Care Act. The Obama administration has claimed that 50 million to 129 million Americans have some kind of health issue that could lead to denial of coverage or a higher premium, on the individual market. But that’s if those Americans seek coverage on the individual market plan. A Government Accountability Office report released this March estimated that 36 million to 122 million in 2009 had a preexisting condition that could result in insurance companies restricting coverage.

The administration estimated that anywhere from 9 million to 25 million of the uninsured had a preexisting condition. And the Kaiser Family Foundation estimates that 70 percent of the uninsured — which now total 48.6 million — have been without health insurance for more than a year.

Insurers do turn down applications based on health status. A 2010 congressional investigation showed that the four largest for-profit insurance companies — Aetna, Humana, UnitedHealth Group and WellPoint — had turned down more than 651,000 applicants over three years. That equaled one denial for every seven applications, and the number of rejections had been increasing each year. A 2009 survey conducted by America’s Health Insurance Plans, a trade group, showed that 13 percent of individual market applicants were turned down, 34 percent of those covered were charged more than standard rates, and 6 percent of those covered had certain conditions excluded.

One thing is clear: Romney has twice glossed over the fact that he wants to extend preexisting condition provisions only for those without gaps in coverage. He has said that he will repeal and replace the federal health care law, but he hasn’t released a detailed written plan on what exactly he would do.

— Lori Robertson