A new Kaiser Family Foundation study finds that 52 million adults under 65 – or 27 percent of that population — have pre-existing health conditions that would likely make them uninsurable if they applied for individual health coverage under medical underwriting practices that existed in most states before insurance regulation changes made by the Affordable Care Act (Obamacare).

The rates of declinable pre-existing conditions vary from state to state. On the low end, in Colorado and Minnesota, at least 22 percent of non-elderly adults have conditions that would likely be declinable if they were to seek coverage in the individual market under pre-ACA underwriting practices, according to the analysis.
Rates are higher in other states – particularly in the South – including Tennessee (32%), Arkansas (32%), Alabama (33%), Kentucky (33%), Mississippi (34%), and West Virginia (36%), where at least a third of the non-elderly population would have declinable conditions in the pre-Obamacare individual market.

States with the most people estimated to have the conditions include: California (5,865,000), Texas (4,536,000), and Florida (3,116,000).

During the post- election talk about replacing Obamacare, President-elect Donald Trump and both political parties have indicated they want to continue protecting people with pre-existing conditions.

Five Northeast states (Massachusetts, Maine, New Jersey, New York and Vermont) had broadly applicable guaranteed access to insurance before the ACA thus how they might be affected by changes to or repeal of Obamacare is unclear.

Using data from two large government surveys, the analysis estimates the total number of nonelderly adults in each state with a health condition that could lead to a denial of coverage in the individual insurance market, based on pre-ACA field underwriting guides for brokers and agents. Kaiser says the results are conservative because the data don’t include some declinable conditions. The estimates also don’t include the number of people with other health conditions that wouldn’t necessarily cause a denial, but could lead to higher insurance costs based on underwriting.

While most people with pre-existing health conditions have coverage through an employer or public program, such as Medicaid, they may intermittently seek insurance in the individual market during times when they’re ineligible for other coverage, such as following a job loss or divorce. People who are self-employed, early retirees, or lower-wage workers in jobs that don’t provide health benefits often are covered by individual plans for longer periods.

Before ACA protections took effect in 2014, private insurers in the individual health insurance market in most states could use applicants’ health status, health history and other risk factors to determine whether and under what terms to issue coverage. Some examples of conditions which could have led to automatic denial of coverage include Alzheimer’s, cancer, cerebral palsy, diabetes, severe obesity, epilepsy, heart disease, Parkinson’s, stroke and pregnancy.

Prior to the ACA’s coverage expansions, Kaiser estimated that 18 percent of individual market applications were denied. This is an underestimate of the impact of medical underwriting because many people with health conditions did not apply because they knew or were informed by an agent that they would not be accepted, according to the analysts. Denial rates ranged from 0 percent in a handful of states with guaranteed issue to 33 percent in Kentucky, North Carolina, and Ohio. According to 2008 data from America’s Health Insurance Plans, denial rates ranged from about 5 percent for children to 29 percent for adults age 60-64 (not accounting for those who did not apply).

The new analysis, Pre-Existing Conditions and Medical Underwriting in the Individual Insurance Market Prior to the ACA, looks at medical underwriting practices common in the individual market before the health law’s prohibitions. The practices include declinable medications and occupations and general pre-existing exclusion provisions.

Source: Kaiser Family Foundation