Court Challenge to Health Care Law a Major Threat for Older Adults and People with Preexisting Health Conditions

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NOTE:  This post was written in 2018, a few months after Texas v. United States was filed in federal district court.  Subsequently, California lead a group of states and the U.S. House of Representatives to intervene and defend the Affordable Care Act. This 2018 post discusses the same three questions that are pending before the U.S. Supreme Court in the now re-named case on appeal, California v. Texas.  

Efforts to repeal the new health law continue. A new threat has emerged in the form of a court challenge, Texas v. United States, asserting the law is unconstitutional and should be struck down. With support from a recent brief filed by the Department of Justice (DOJ), this challenge pierces the heart of the law’s core protections that were put in place to ensure older adults and people with preexisting conditions have access to comprehensive and affordable health care.

The Court Challenge

Under the 2017 tax legislation, beginning in January 2019 Americans are no longer required to pay a financial penalty if they do not have health insurance coverage. This change in effect eliminated one mechanism in the health law intended to encourage individuals to purchase health insurance. The plaintiffs and the DOJ argue that without the tax penalty, the law’s requirement that people have health insurance coverage is unconstitutional – and that by extension, its core protections for older adults and people with preexisting health conditions can no longer be valid.

Key Protections are at Risk

Today, a person of any age with cancer or heart disease, or any other health condition, mental condition, or disability can access comprehensive health coverage. Protections in the health law known as “ guaranteed issue” prevent health insurance companies from denying coverage based on a person’s health. Protections known as “ community rating” prevent insurance companies from discriminating against older people and charging them excessive prices to obtain coverage, or charging unaffordable rates based on their health

In short, these protections put an end to common insurance practices that left millions of older adults and people with preexisting health conditions uninsured or financially devastated.

Loss of Protections Could Harm Millions of People

If these protections are struck from the law, the impact will be felt by millions of Americans. More than one in every four Americans—an estimated 52 million people—has a preexisting health condition and could be denied coverage by an insurer. Many more could be charged unaffordable rates based on their health.

Older Americans would be disproportionately harmed. First, a larger proportion of older adults have a preexisting condition— 40% of those ages 50-64, or 25 million adults. Second, without the protections, insurers could charge older adults significantly more than three times what other people pay for the exact same coverage, a common practice before the health law was passed.

By our estimate, if insurers were to charge a 60 year-old five times more than her younger counterpart, premiums could increase by $3,200 a year. Without financial assistance, annual premiums for that 60 year-old would be $18,000.

The Old Days Were Not the Good Days

Before implementation of the health law, the number of uninsured 50-64 year-olds were growing at an alarming rate, increasing from 5.2 million in 2000 to 9.3 million in 2012.  With the health law’s protections, the uninsured rate for 50-64-year olds dropped dramatically, from 9.1 million in 2013 to 5.4 million in 2016.

Without these key insurance protections, what remains of the health law will be meaningless for older adults and people with preexisting conditions. It would be a travesty to return to a situation where millions of older individuals and people who have health care needs cannot obtain health coverage. 

The outcome of the court’s ruling is significant. Pay attention!