Graham-Cassidy bill's pre-existing condition protections an 'empty promise,' experts say

As has been the case with previous Republican healthcare bills, the national conversation surrounding Sen. Bill Cassidy and Sen. Lindsey Graham’s legislation has become fixated on one issue: pre-existing conditions.

On the one side, late-night comedy host Jimmy Kimmel drew national headlines when he said Cassidy “just lied right to my face” when pledging to protect individuals with pre-existing conditions like Kimmel’s son.

But Graham and even President Donald Trump hit back, refuting claims that the bill “doesn’t cover pre-existing conditions” and even calling such assertions “fake news.”

So what’s the real story? To find out, FierceHealthcare took a closer look at the bill and consulted policy experts.

The Graham-Cassidy bill does not repeal the Affordable Care Act’s rule that prevents insurers from denying coverage to those with pre-existing conditions—a provision known as guaranteed issue. However, it does allow states to opt out of other rules governing the individual and small-group markets that protect individuals with pre-existing conditions. These include:

• The rule that insurers can’t charge higher premiums based on health status—also known as community rating.
• The essential health benefits requirements, without which consumers who need certain services or prescriptions could face high out-of-pocket costs that restrict their access to care.

Allowing states to waive those rules means “you could price someone out of the market or you could sell them a policy that doesn’t cover the services that they need,” said Katherine Hempstead, the Robert Wood Johnson Foundation’s senior adviser to the executive vice president.

Thus, she said, simply saying the bill protects those with pre-existing conditions "ends up being an empty promise."

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The bill also says states can waive “any provision” that restricts which criteria health insurers can use to vary premium rates, or how much they can vary those rates. However, insurers “may not vary premium rates based on an individual’s sex or membership in a protected class under the Constitution of the United States.”

That “throws the door wide open” for states to let insurers vary their rates as they see fit, said Tim Jost, a professor emeritus at the Washington and Lee University School of Law. For example, states could loosen the ACA’s age-rating bands, which currently prohibit insurers from charging older consumers more than three times as much as younger ones.

The bill does say that states applying for a waiver must detail how they intend to “maintain access to adequate and affordable health insurance coverage for individuals with pre-existing conditions.” But Jost noted that the bill isn’t specific about how “adequate and affordable” would be defined—instead leaving it up to the Health and Human Services secretary’s discretion.

In addition, Jost pointed out that there is no process to review or revoke waivers once they’re issued, so states that don’t actually ensure coverage is adequate and affordable might not be held accountable.

Not every state would likely use waivers to opt out of key ACA provisions, Hempstead acknowledged, but some certainly would do so because that’s the way the individual markets were before the current health law was passed.

“It sounds like it would be very, very easy to set up something like a high-risk pool that some people would view as a very distinct step backward,” she said.

What’s more, the traditional Medicaid population—which tends to be sicker and includes disabled individuals—could be hit hard by the bill’s changes to Medicaid financing.

“The per capita caps are going to erode states’ ability to provide comprehensive services because they will have a whole lot less money,” she said.