Will the New ACA Lawsuit Wreak Havoc on Healthcare?

Leigh Page

Disclosures

September 05, 2018

In This Article

Who Would Be Affected?

The DOJ's proposal to eliminate the preexisting conditions provision is often portrayed in the media as having a widespread impact. Depending on what conditions are included, 20%-66% of adult Americans have preexisting conditions.[2]

However, most of these people wouldn't be affected if the provision were removed from the law, Stuart says. Among those, he says, would be most people in employer-sponsored insurance, who account for just under one half of all Americans. Most of them would be protected by another law, the Health Insurance Portability and Accountability Act (HIPAA).[3] Meanwhile, 38% of Americans are enrolled in Medicaid and Medicare, which don't have restrictions on preexisting conditions.

However, within the employer-sponsored group, HIPAA doesn't protect two groups of covered employees, but these exceptions may have limited impact:

  • Newly hired employees. During the first year of work, employer-sponsored plans may choose to exclude an employee's preexisting condition from coverage. That is, the employee would have general health coverage, but not for the preexisting condition during that time.

  • Employees at companies that self-insure. Large corporations may be exempt from the HIPAA mandate because they're self-insured. But a representative of this group, asked in June about the impact of the DOJ's plan, stated that large companies routinely covered all employees even before the ACA forced them to do so.[4]

In addition, many states have partial protections for people with preexisting conditions, and five states (Maine, Massachusetts, New Jersey, New York, and Vermont) have full protections, according to a 2015 report.[5] Stuart believes that many more states would pass full protections if the ACA provision were removed.

One group, however, is not protected nationally: people in the individual insurance market. This group, which makes up 7% of all Americans, includes self-employed people and people not covered by their employers. It also includes the 10 million people who bought insurance on the ACA marketplaces, or exchanges.

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