Senate Bill Will Be Enough to Cover Pre-Existing Conditions

By Richard Morris & Eileen McGann

July 17, 2017 3 min read

Will the Senate bill now pending to replace Obamacare be adequate to meet the needs of Americans with pre-existing conditions? The question looms large in the decision-making process of many Republican "moderates."

But the actual experience of covering those with pre-existing conditions under Obamacare shows that the funding of $70 billion for this purpose over 10 years allocated in the Senate bill is more than adequate.

Obamacare, too, faced the high costs of covering those with pre-existing conditions and dealt with it in Section 101 of the Affordable Care Act that established the Pre-Existing Condition Insurance Plan. It was designed to cover "those who are locked out of the insurance market" due to their health status. It promised that it would make "health coverage available and more affordable to uninsured individuals who have been denied health insurance due to a pre-existing condition."

Initially, in April 2010, the CMS Office of the Actuary estimated that 375,000 people would need coverage under PCIP. But, in 2012, only 134,708 actually needed — and got — coverage.

And the actual cost of PCIP in 2012 was $4.4 billion, well below the amount allocated annually in the Senate bill. The average cost of PCIP coverage came to $32,108 per patient. Half of the money went to cover only 5,927 people, 4.4 percent of the total.

In 2010 and today, experts wildly overestimated the number and cost of covering those with pre-existing conditions. But now we have experiential data, not just guesswork to measure the adequacy of our response.

So lets not overestimate the cost of those with pre-existing conditions. The $70 billion in the Senate bill is more than enough, and the option always exists to change the law to let the 6,000 very ill people into Medicare for coverage even though they are under 65.

To Republicans: For goodness sake, don't let overestimates of the difficulty of covering pre-existing conditions lead you to vote against this bill and renege on your promises over the past seven years.

(Thank you to Michael Cannon of the Cato Institute for information that contributed to this article.)

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