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The Preexisting Conditions Debate, Again

Once again, Republicans and Democrats are making competing claims on whether the latest GOP effort to repeal the Affordable Care Act continues to protect those with preexisting medical conditions. Under the Graham-Cassidy bill, insurers couldn’t refuse to sell policies, but they could price plans based on health status in states that allowed it.

Politicians have glossed over the finer points of the legislation, just as we saw several months ago when House Republicans were about to pass their health care bill.

  • Louisiana Sen. Bill Cassidy, a sponsor of the latest Senate bill, falsely said on CNN that the “protection is absolutely the same” as the ACA regarding preexisting conditions. It isn’t. The ACA, unlike Graham-Cassidy, doesn’t allow state waivers to price premiums based on medical conditions.
  • President Donald Trump said on Twitter that “I would not sign Graham-Cassidy if it did not include coverage of pre-existing conditions. It does!” Sen. Lindsey Graham said that “factually, our bill requires preexisting illnesses to be covered in the block grant.” But those comments ignore the potential that premiums could be higher for those with health issues.
  • Democratic Sen. Chuck Schumer said on the Senate floor that “the ban on discriminating against people with preexisting conditions would be gone.” Not completely.
  • And while Sen. Al Franken correctly explained the details of state waivers in the bill, he added the sweeping claim that “there would be no protections for people with preexisting conditions.” There are some, and the impact depends on what states decide to do.

The Graham-Cassidy legislation would eliminate the Affordable Care Act’s premium tax credits and cost-sharing subsidies for low-income people buying coverage on the individual market, as well as federal funding for the expansion of Medicaid, and instead provide block grants to states, starting in 2020. Those block grants could be used for a variety of health insurance measures, including programs for high-risk individuals, cost-sharing assistance and improving premiums on the individual market. (For more details on the bill, see our story “The Facts on the GOP Health Care Bills.”)

The legislation says states must submit applications explaining how they would spend the block grant funds and, if necessary, describe any waivers that they’re requesting. A state could waive the ACA’s ban on pricing insurance policies based on health status, provided it described “how the State intends to maintain access to adequate and affordable health insurance coverage for individuals with pre-existing conditions if such waiver is approved.”

States could allow insurers to vary premiums, including “on the basis of any health status-related factor,” but not on the basis of gender, race or religion. Here is the language in the legislation describing what provisions states could waive for the block grant funds:

Graham-Cassidy legislation: (I) Any provision that restricts the criteria which a health insurance issuer may use to vary premium rates for health insurance coverage offered in the individual or small group market, or the degree to which an issuer may vary such rates, except that a health insurance issuer may not vary premium rates based on an individual’s sex or membership in a protected class under the Constitution of the United States.

(II) Any provision that prevents a health insurance issuer offering a coverage plan in the individual or small group market from requiring an individual to pay a premium or contribution (as a condition of enrollment or continued enrollment under the plan) which is greater than such premium or contribution for a similarly situated individual enrolled in the plan on the basis of any health status-related factor in relation to the individual or to an individual enrolled under the plan as a dependent of the individual.

The bill doesn’t eliminate, or allow states to waive, the ACA’s prohibition on insurers denying coverage to those with preexisting conditions, or the prohibition on insurers excluding coverage of preexisting conditions, as the Kaiser Family Foundation’s summary of the legislation explains.

So, it’s not true that there are “no protections,” as Franken said. Nor is it true that the “protection is absolutely the same,” as Cassidy said on CNN. He went on to say: “There’s a specific provision that says that if a state applies for a waiver, it must ensure that those with preexisting conditions have affordable and adequate coverage.”

That’s different from current law.

Under the ACA, states can request waivers from some of the law’s insurance provisions, but they can’t get a waiver from the requirement that insurers price policies the same, regardless of health status. “No state can waive that requirement,” Sabrina Corlette, research professor at Georgetown University’s Center on Health Insurance Reforms, said in a phone interview with FactCheck.org.

Corlette points out that allowing insurers to charge consumers different premiums based on health status — which is what occurred on the individual market before the ACA — could affect not only those who now have preexisting conditions, but anyone who develops a health condition in the future. When it’s time to renew a policy, the premium could go up.

Under Graham-Cassidy, states would have to explain how they intend “to maintain access to adequate and affordable” insurance, as Cassidy said, but it remains to be seen what would be considered “adequate and affordable.” The bill doesn’t provide any additional details on that; the Department of Health and Human Services could issue regulations on how states would meet that requirement if the bill became law.

Both Graham-Cassidy and the ACA allow states to waive the ACA’s 10 essential health benefits requirements. However, under the ACA, a state waiver plan must “provide coverage that is at least as comprehensive,” “at least as affordable” and “provide[s] coverage to at least a comparable number of its residents,” the law says. (For more on the ACA’s Section 1332 waivers, see this July issue brief by the Kaiser Family Foundation.)

Graham-Cassidy provides more leeway for states to change those benefits. In fact, Corlette said states that have wanted to relax the benefit requirements have complained that it’s not possible under the ACA’s standard that coverage be “at least as comprehensive.”

The Senate could vote on the legislation next week, but it’s unclear if it would have the necessary Republican votes to pass, particularly since Sen. John McCain said he would vote against it.