A way to understand the Republican party’s relationship with Obamacare is to separate it into two periods: Before Pre-existing Conditions (2010-17) and After Pre-existing Conditions (2017-).
In the years B.P.C., Republicans did not talk much about the Affordable Care Act’s protections for consumers with pre-existing health conditions. They talked instead about Politifact’s 2013 “Lie of the Year”: President Obama’s unfulfilled guarantee that “if you like your plan, you can keep it.” They talked about taxes included in the law to help pay for its provisions that even many Democrats disliked, evidenced by the delay of the “Cadillac tax” and the medical device tax, for example. They talked about the law’s requirement that individuals purchase compliant insurance or pay a penalty, which the public generally viewed unfavorably before Donald Trump became associated with the position in poll questions.
This rhetoric gave Republicans a formidable political case against Obamacare, which helped them win some big elections, culminating in 2016. But it did not provide them a strong case based on policy. Their new majority of a unified government required them to set the course for a post-Obamacare world and convince the public it was palatable. But all they had done is feed voters the easy pickings of the law. The whole country has a taste for more than red meat.
For example, Obamacare includes protections for individuals with pre-existing health conditions, which were in just five states prior to 2014. The core protections ban insurers from turning away applicants and charging higher premiums based on their medical history. These provisions have consistently rated as the most popular significant change the law made to the individual health insurance market—87 percent of Americans approved of them in a March 2017 CNN poll, which was conducted the week before House Republicans released their Obamacare replacement bill.
The GOP pledged to keep those rules in place. In fact, a website created by leadership to educate the public even touted pre-existing conditions as a reason to support its legislation, the American Health Care Act. There was no reason to doubt Republicans’ sincerity, since opposing the rules was untenable politics. But there is reason to doubt they knew what they were doing.
More than just a well-liked perk of Obamacare, the regulations banning medical underwriting were the heart and soul of the law’s changes that pertained to the individual market. They included intertwined reforms, like requiring Obamacare-compliant plans to offer a list of essential health benefits—which made minimum coverage stronger, but more expensive. This leaves out some related changes and fine print; it is merely the gist.
And once conservatives understood it, Republican efforts to undo the law fractured. The ultra-conservative House Freedom Caucus dug into the weeds of the rules and was concerned some of the protections were uneconomic and unfair. Don’t they just incentivize healthy people to forgo buying insurance until they need it, overloading the market with risky consumers and pushing the average premium to unaffordable levels? (The individual mandate was an enforcement mechanism to prevent this; even some of the law’s architects, like MIT economist Jonathan Gruber, said it wasn’t effective enough.) Why should younger people have to purchase robust coverage they don’t want and need? These are fundamental questions about risk-sharing in an insurance market—and fundamental questions about Obamacare.
That Republican lawmakers began wrestling with them only in 2017 is evidence they were unprepared for the debate. The Freedom Caucus’s objections helped sideline the American Health Care Act just two weeks after it was introduced. It was revived after moderates and conservatives agreed to let states waive some of the regulations on a limited basis, and allocated money to offset some of the potential costs to consumers. While the negotiations helped Republicans pass their bill in May, they gave Democrats a potent message: that the GOP was out to undermine protections for people with pre-existing conditions. It helped sink Republican plans in the Senate. While the majority successfully nixed the individual mandate in December’s tax reform bill, the Republicans have not pushed a comprehensive Obamacare alternative in Congress since.
This preface frames the latest news about the law’s pre-existing conditions protections and Republican pledges to defend them. It can be separated into a 1a and a 1b:
First, in August, the Trump administration finalized a rule allowing insurers to offer “short-term, limited duration” (STLDI) coverage for a period of up to 364 days, renewable for up to three years. The previous definition of such insurance made it effective for only 90 days. The updated definition makes STLDI a viable, medium-term alternative to bronze- or silver-tier insurance (the cheapest, but relatively more expensive levels of Obamacare plans). The catch is that these plans are not subject to the law’s requirements—meaning that they lack protections for people with pre-existing conditions.
Second, last Monday, the Trump administration issued guidance expanding the ability of states to mold their own health insurance markets under Obamacare. One of the goals was to allow more sign-ups for plans like short-term, limited duration insurance. The Departments of Health and Human Services and the Treasury, which issued the guidance, said so expressly: “A … state plan should foster health coverage through competitive private coverage, including [association health plans] and STLDI plans, over public programs.”
Neither of these developments involves Congress changing the language of Obamacare. While they have policy implications, they don’t reword the underlying law. This gives Republicans the space to say they aren’t meddling directly with the regulations that pertain to consumers with pre-existing conditions. “To be clear, nothing in this new guidance reduces protections for people with pre-existing conditions,” stated Centers for Medicare and Medicaid Services administrator Seema Verma.
Democrats are saying just the opposite. “Republicans are once again undermining protections for people with pre-existing conditions and sabotaging our health care system,” said Senate Minority Leader Chuck Schumer.
Schumer’s use of “undermine” bears a careful reading. The Trump administration predicts that the expanded availability of the short-term plans on the individual market will entice new consumers to purchase coverage. But Democrats and many sympathetic policy experts worry that this will create an imbalance, costing the most vulnerable consumers money. The people buying short-term plans are likely to be relatively young and healthy: the types of consumers Obamacare needs to offset the costs of the relatively old and unhealthy. If fewer low-risk individuals subsidize the cost of high-risk individuals, the cost of premiums for the latter group will increase.
The pre-existing conditions rules are “no help if it applies only to the community of people who cannot pass medical underwriting,” is how Brookings Institution scholar Mark Hall put it last year.
But note that this relates to cost and not availability. While consumers can be denied short-term coverage because the plans are not subject to Obamacare’s regulations, consumers are still guaranteed the right to purchase an Obamacare-compliant plan. It’s just that under this new arrangement, the availability of the short-term plans could make the premiums of the Obamacare-compliant plans more expensive. Whether or not this is fair is a policy preference. It’s not clear that a rush of Republican state governments will determine it is. Some of the highest proportions of people with pre-existing conditions live in red states, for example. And GOP governors were mixed last year about congressional proposals to grant them other waiver authorities.
The last 18 months, however, have clarified one thing about the healthcare reform debate: The definition of “protecting people with pre-existing conditions” obviously favors the Democrats. At no point has a significant group of Republicans wanted to take away Obamacare’s guarantee of health coverage to anyone who wants to buy a plan on the exchanges. But the two major parties continue to disagree over what kinds of insurance coverage should be available to consumers of different health risks—and how much insurers should be able to charge for it. Republicans lost that debate in 2017. They are losing it still in 2018. It is the defining feature of the After Pre-existing Conditions years.
