The Supremes and pre-existing conditions

What if the Court rules that insurers don’t have to cover people suffering from pre-existing conditions?

  • By
  • healthinsurance.org Contributor
  • June 24, 2012

Note to readers: I welcome reader comments and questions, and will try my best to reply in a timely manner. I ask only that you do your part to keep our discussion both reasoned and polite. – MM

denied coverage pre-existing conditions

If the Supreme Court overturns the individual mandate – which would require most Americans to buy insurance – the Court may rule that if everyone doesn’t have to buy insurance, insurance companies shouldn’t have to insure everyone.

In March, Ethan Fidler, a 10-year-old from England who had just had a tumor removed from his brain flew to Florida where doctors at the University of Florida used proton therapy to blast lingering cancer cells. (While proton therapy is widely available in Western Europe, the UK government has only recently approved funding the technology. Ethan couldn’t wait.)

The UK’s National Health Service (NHS) laid out the money to fly him 4,000 miles “and pay upwards of $78,000 for the treatment just as it routinely pays the bills for many others citizens as long as medical evidence shows that the patient will benefit from the treatment” The Guardian reported.

The irony is that many American cancer patients are not able to get the same cutting-edge treatment, even though they, too, would benefit. “We have all the technologies, but there is a group of people who don’t have access,” Dr. Eric Sandler, a children’s cancer doctor and a board member of the American Cancer Society (ACS) told The Guardian.

Often, this is because they suffer from a pre-existing condition and insurers refuse to cover them.

Myth: hospitals have to treat you

Steve Finan, senior director of policy at the ACS Cancer Action Network, explained how not everyone with cancer in the United States gets the treatment they need:

There is a belief in some quarters, says Finan, that anybody who needs care will get it, because if you go to the emergency room, they are obliged to treat you. “It’s absolutely not true. Hospitals are only required to stabilise you. Once they have, they can dismiss you,” he says. That’s no good for those with chronic conditions like cancer.

Finan is right. Under the law, the rules are clear: if a patient is “stabilized,” he does not have to be treated, “even though the underlying medical condition may persist.”

Moreover, a hospital is required to stabilize a patient only in an “emergency” – and there is disagreement as to what constitutes an emergency. In Money-Driven Medicine, I described several uninsured patients who were turned away from an ER or a hospital’s outpatient clinic because they couldn’t pay upfront – including one who had suffered a beating that shattered his jaw. By the time he was shown the door at the second hospital, he could barely talk.

Under reform, insurers cannot shun the sick, unless …

In most states, it is perfectly legal for insurers to refuse to sell a policy to someone who is – or has been – sick. Alternatively, a company may offer overage, but only at a price that few could possibly afford.

Under the Affordable Care Act (ACA) this is supposed to change – as long as the Supreme Court does not strike down the provision in the ACA stipulating that, beginning in 2014, insurers must cover all applicants despite pre-existing conditions – and cannot charge them more.

Why would the Justices eliminate this popular provision? Because, if they overturn the individual mandate, requiring that most Americans buy insurance (or face a penalty), they may rule that if everyone doesn’t have to buy insurance, insurance companies shouldn’t have to insure everyone.

Otherwise, in the absence of a mandate, many would postpone buying insurance until they became ill, secure in the knowledge that insurers won’t be able to turn them down – or demand an exorbitant premium.

If that happened, the insurance pool soon would shrink to a much smaller group, crowded with sick individuals, many in need of expensive care. The cost of that care could easily overwhelm the health plan, outstripping the premiums that an insurer would collect from fewer people. States would then have to let insurers hike premiums and, in turn, more healthy 30-somethings would decide to postpone purchasing coverage – driving premiums even higher.

Presidential candidate Mitt Romney favors requiring that insurers cover the sick – as long as a family manages to maintain “continuous coverage.” But what if a parent loses a job, and a middle-class family can no longer afford coverage? If a child in the family is then diagnosed with a serious disease, insurers would not be required to cover her.

The ACA has created high-risk insurance pools to help people with pre-existing conditions who have been without insurance for at least six months. But that law will expire in January 2014, leaving about 60,000 sick Americans high and dry.

This brings us back to where we are today – living in a nation where health care is rationed by ability to pay. No one will be forced to buy insurance. Everyone will be “free to choose” as much –or as little – health care as they can afford.

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