Prior to the Affordable Care Act (ACA), having a pre-existing health condition, such as a severe respiratory illness, made it harder or even impossible for people to get and keep private health insurance in the individual market. Coverage people bought on their own in this market was “medically underwritten” in most states. That meant applicants had to answer questions about their health status and history and, based on their answers, could be turned down, charged more, or offered a policy that permanently excluded their health condition. Job-based group health plans could also exclude coverage for pre-existing conditions for up to one year. However, people could change jobs and move to a new group health plan without a new exclusion period as long as they didn’t have a gap in coverage longer than 2 months. And even before the ACA, employers could not deny eligibility for group health benefits or charge people more for group health benefits based on health status.
Since 2014, the ACA generally has made it illegal for private insurance to exclude coverage for pre-existing conditions or to deny coverage or charge higher premiums on that basis. In November, the Supreme Court will hear oral arguments on California v Texas, a lawsuit brought by Republican state officials and supported by President Trump, that seeks to invalidate the ACA entirely. If the ACA is overturned, federal law protection for people with pre-existing health conditions would end. While some states have moved to enact similar insurance market reforms since the lawsuit was filed, tens of millions of people residing in many states – including Texas and most of the other plaintiff states that have not – could again be subject to medical underwriting. And, even in states that have moved to assure pre-existing condition protections, it would be difficult to avoid a premium “death spiral” with federal subsidies to make coverage more affordable and encourage currently healthy people to sign up.
What might this mean for people in the time of COVID-19? Below are a few key questions and answers.
How costly and serious is COVID-19 as a health condition?
So far, most confirmed cases of COVID-19 have been relatively mild, with symptoms lasting about 2 weeks and requiring little or no medical treatment. However, scientists are still studying the clinical course of COVID-19 and the return-to-health-baseline for people with milder, outpatient illness. In one CDC study so far of symptomatic adults who had a positive COVID-19 test result, 35% had not returned to their usual state of health when interviewed 2-3 weeks after testing. Among younger adults (18-34) with no other chronic medical conditions, one in five had not returned to their usual state of health. Patients who experience symptoms for weeks or months following so-called recovery and clearing of the virus are sometimes called “long haulers.” The most common lingering symptoms for long haulers include fatigue, cough, headache, and loss of taste and smell.
A smaller share of patients have more severe illness requiring hospitalization. On average, a hospital stay for COVID-19 complications could top $20,000 with costs approaching $90,000 if ventilator support is required. Additionally, scientists are beginning to study possible long-term health effects in patients with severe cases of COVID-19; while most appear to recover fully, a small number have experienced longer-term damage to the lungs, heart, or immune system. Scientists also are studying how long immunity to COVID-19 may last – whether natural immunity following infection or from a vaccine; so far a small number of cases of re-infection have been reported.
If the ACA were overturned, could insurers discriminate against people with COVID-19?
Yes. Before the ACA, medically underwritten health insurance sold to individuals could discriminate based on a person’s health conditions and history as well as other risk factors. So, for example, someone who applies for medically underwritten health insurance while sick – or after having been sick – with COVID-19 might be turned down, charged more, or offered a plan that excludes coverage for COVID-19 or related symptoms. A positive test for the coronavirus could also be used in medical underwriting.
In addition, someone who has recently been tested negative for COVID-19 – for example, a rideshare driver who gets tested from time to time out of concern about his potential exposure – might also be discriminated against if insurers determine people who seek testing tend to be at higher risk of getting COVID-19. If ACA protections are invalidated, such people might be turned down, charged more, or offered a policy that temporarily or permanently excludes coverage for COVID-19.
How would a pre-existing condition exclusion period work for COVID-19?
The rules about so-called pre-existing condition exclusions varied by state. In nearly all states, in addition to denying coverage or surcharging premiums, insurers could impose permanent pre-existing condition exclusions for any condition already diagnosed and disclosed at the time of application. That means claims for otherwise covered services under the policy would be denied for the pre-existing condition.
In most states, insurers could also retrospectively impose a pre-existing condition exclusion period (of a year or longer) for conditions first diagnosed after buying a policy if the condition was one for which, in the insurer’s judgment, a “prudent layperson” would have sought medical advice or treatment. Before the ACA, applications for underwritten coverage required people to grant insurers full access to their medical records. If a newly insured person were to come down with COVID, the insurer could engage in “post-claims underwriting” to learn whether the patient had experienced symptoms, sought testing, or been exposed to the disease before buying the policy and, if so, the insurer might exclude coverage for the condition.
In some states, insurers could also count as pre-existing any other condition that existed prior to coverage, even if the patient did not know and could not have known they had it. Under these rules, a person who buys an individual policy when she is newly (and unknowingly) infected by the coronavirus, and who gets sick shortly afterwards, might find that her insurer refuses to pay for any COVID-19 care because the condition was pre-existing.
Under job-based group health plans, the definition of “pre-existing condition” prior to the ACA was narrower. A condition could be subject to an exclusion period only if the patient sought medical advice, diagnosis, or treatment for it within a six-month period prior to enrolling in a new plan. Even under this rule, someone who gets tested for COVID-19 the day before enrolling in a group health plan and who gets her positive result 3 days later might still be subject to a pre-existing condition exclusion period.
How would insurers treat someone with a mild case of COVID-19?
This could vary from insurer to insurer. Some insurers might accept people with mild cases of COVID-19 with few or no limitations. However, before the ACA, insurers could and did take adverse underwriting actions against even relatively mild pre-existing conditions: They might deny an application. They might offer coverage with a surcharged premium (e.g., 150% of the standard rate for people in perfect health.) Or they might offer coverage with specific limitations. These could include a temporary or permanent exclusion of coverage for any claims related to a pre-existing condition. Insurers might also exclude coverage for the body part or system affected by that health condition. Or insurers might limit coverage in other ways – for example, eliminating the prescription drug benefit or increasing the otherwise applicable deductible.
A KFF survey of medical underwriters conducted 20 years ago tested insurer actions taken against a variety of health conditions, from mild to severe. The survey presented one hypothetical applicant in excellent health except she had seasonal hay fever. In 60 applications for coverage, this applicant was turned down 5 times, offered coverage with surcharged premiums 6 times, and offered coverage with benefit limits 46 times – including permanent exclusion of coverage for her allergies and, in three cases, for her entire upper respiratory system. In just 3 of 60 applications, insurers offered standard coverage with no special exclusions, benefit limits, or premium surcharges. Applicants with more serious medical conditions received more adverse underwriting actions.
What about a more severe case of COVID-19 with lasting effects?
So far, a small number of people with confirmed COVID-19 infection have developed symptoms or complications that are more serious and longer lasting. Depending on the severity, such complications could render affected patients “uninsurable” in the individual insurance market under pre-ACA rules. Before the ACA, insurers maintained lists of “declinable” medical conditions – including chronic lung, heart, and immune disorders – for which applicants would always be turned down. An estimated 54 million adults prior to the pandemic had declinable medical conditions that would prevent them from buying medically underwritten health insurance.
My job puts me in regular contact with the public and at risk for COVID-19 infection. Could that make it harder to get health insurance without the ACA?
Yes, it might. Before the ACA, many insurers also maintained a list of uninsurable occupations. Applicants could be turned down or charged more if they worked in jobs that were considered higher risk. Examples of “ineligible occupations” included mining, crop dusting, and explosive handlers, as well as taxicab drivers and workers in meat processing plants.
Since the onset of the pandemic, I have struggled with anxiety and depression. Could that affect my ability to get coverage if the ACA is overturned?
Yes, it could. There has been a documented increase in the incidence of anxiety and depressive disorders since the onset of the pandemic. Prior to the ACA, medically underwritten health insurance would nearly always decline applications from people with serious mental disorders, such as eating disorders or bipolar disorder. However, insurers also took adverse underwriting actions against other mental health conditions. The KFF underwriting survey tested a hypothetical applicant in perfect health except she suffered from situational depression following the death of her spouse. In 60 applications for coverage, this applicant was denied a quarter of the time, and offered coverage with a surcharged premium and/or benefit exclusions 60% of the time.
Would health insurance cover treatment for COVID-19 in the same way if the ACA were overturned?
Possibly not. Prior to the ACA, insurance policies sold in the non-group market were not required to cover essential health benefits. Many, for example, offered no or only limited coverage for mental health, substance use treatment, or prescription drugs. In addition, most private insurance applied annual and/or lifetime limits on covered services. Prior to the ACA, insurers also maintained lists of uninsurable medications for which patients would be denied coverage.
To date, there are no approved treatments specifically for COVID-19. New treatments are being studied and it is likely new treatments will be developed in the future. Meanwhile, some treatments – authorized under emergency- or other limited authorities – currently are being given to COVID-19 patients. And some of these are expensive; for example the manufacturer of Remdesivir charges more than $3,000 for a five-day treatment.