Although the DOJ declined to intervene in a federal lawsuit that could strike down the ACA’s ban on denying coverage to anyone with pre-existing conditions, GOP lawmakers appear to want to let the provision stand.
The Department of Justice’s decision to support a federal lawsuit brought by Texas and 19 other states to declare the Affordable Care Act unconstitutional has the potential to strike down one of the act’s most popular provisions. If the lawsuit is upheld — and that is far from certain at this point — the ban on insurers denying coverage to individuals with pre-existing conditions may be eliminated.
The lawsuit argues that, since Congress has already repealed the individual mandate — a change which will go into effect in 2019 — the ACA as a whole has been invalidated. Attorney General Jeff Sessions agreed with the argument, saying in a letter to Congress that the DOJ has no interest in defending the constitutional basis for the law, including the mandate that insurers sell policies to all applicants regardless of health history.
Although the DOJ decision has unsettled the health insurance market, insurance agents should remind their clients that the likelihood of a resolution is still a ways away. Until then, the law remains in effect. That doesn’t mean, however, there won’t be more debate.
GOP Leaders Support Pre-Existing Coverage
The DOJ decision drew criticism from Republican leaders who, while they fought for an ACA repeal, supported coverage for patients regardless of many pre-existing medical conditions.
Senator Orrin Hatch (R-UT), chairman of the Senate Finance Committee that oversees funding for the healthcare law, has said that “No American should be denied health coverage based on their pre-existing medical conditions.” His colleague, Senator Lamar Alexander (R-TN), also disagreed with the DOJ’s argument, saying the agency’s justification was “far-fetched.”
Even within the administration, there appears to be some difference of opinion on the DOJ’s position. Health and Human Services Secretary Alex Azar noted that the DOJ decision was a legal argument, not a policy statement. He added that his agency would continue to work to “ensure individuals with pre-existing conditions can have access to affordable health insurance.”
In response to the Texas-led lawsuit, California and 15 other states filed a brief in support of the ACA. Although the ACA has always been a controversial law, the prohibition against insurers denying coverage to people with serious medical conditions has been one of its most popular provisions. A 2017 poll by the Kaiser Family Foundation found that 70% of consumers favored protections for those with pre-existing conditions.
Insurance Industry Reacts
America's Health Insurance Plans (AHIP), a trade group representing health insurance companies, said in a statement that it supported requiring insurers to offer coverage to anyone with a chronic condition: “Removing those provisions will result in renewed uncertainty in the individual market, create a patchwork of requirements in the states, cause rates to go even higher for older Americans and sicker patients, and make it challenging to introduce products and rates for 2019.”
If the ban is repealed, the impact would go beyond the individual ACA marketplace. Those covered under employer plans, especially smaller companies, would also feel the effects. Companies could impose longer waiting periods before insurance kicks in for new hires, or exclude coverage for certain conditions, such as cancer.
“The implications aren’t nearly as big as for the individual market, but they’re real,” Larry Levitt, Senior Vice President at the Kaiser Family Foundation, told the Wall Street Journal. According to the Kaiser Family Foundation, 18% of applicants who sought individual policies were denied coverage prior to the ACA’s imposition of the ban.The DOJ decision once again puts a spotlight on shifting healthcare policies, which means that your clients will likely come to you with questions about the latest developments. In the end, the ban will likely be upheld due to support from bipartisan leaders. Alternatively, individual states may enact laws to continue the ban and ensure coverage for those with pre-existing conditions as some have done with the individual mandate. As always, though, agents should monitor the debate and make sure that their clients have adequate health coverage in a volatile market.