A late-breaking attempt to repeal and replace the Affordable Care Act (ACA) threatens to weaken critical federal consumer protections and raise costs for older Americans ages 50-64 who purchase health insurance coverage in the individual market. Tucked into the sweeping legislation known as the Graham-Cassidy bill are provisions allowing states to receive waivers from crucial consumer protections. Such waivers could allow insurance companies to increase costs for older consumers based on their health, preexisting conditions, and age–potentially putting health coverage out of financial reach for millions.
People with Preexisting Conditions Could Face Significantly Higher Premiums
Current law prohibits health insurance companies from denying people coverage or charging higher rates based on a person’s health. Under the Graham-Cassidy bill, however, states could obtain a waiver to allow insurers to vary premiums based on people’s health or preexisting condition. This means that consumers with a health condition such as diabetes, cancer, or heart disease could face significantly higher premiums.
This would hit older adults hard: 40 percent of 50- to 64-year olds have a preexisting condition. Prior to the ACA, most states allowed insurers to charge higher premiums based on preexisting conditions. That meant consumers with preexisting conditions were often unable to purchase affordable coverage. The Graham-Cassidy bill would force consumers to, once again, worry about whether their health status will keep them from being able to afford coverage or the care they need.
Less Coverage and Higher Costs for Older Adults and People with Preexisting Conditions
The Graham-Cassidy bill would also allow states to waive current law requirements that health insurance plans cover 10 categories of services (known as Essential Health Benefits). Similar to earlier proposals, states could eliminate some or all of the required benefits. Without these requirements, insurers could choose to exclude or limit important health benefits such as hospital care, prescription drugs, and mental health or substance abuse treatment. For people with health concerns and preexisting conditions, finding adequate, affordable coverage with the benefits they need would very likely become challenging and expensive.
These waivers may also allow states to weaken or eliminate the ACA’s prohibition against dollar limits on benefits people may get in a year or over their lifetime. Such annual and lifetime caps were unfortunately common practice prior to the ACA—forcing some consumers into medical bankruptcy when they got sick. Weakening these key protections is a step backwards for consumers.
Insurance Companies May be Allowed to Discriminate Against Older Americans
Under the ACA, insurers cannot charge older adults more than three times what they charge others for the same coverage (known as 3:1 age rating). Under Graham-Cassidy, however, states may be able to waive this critical protection for older adults. Older adults living in states that have waived that protection would face significantly higher rates simply on the basis of age– potentially as high as five, six or more times what they charge others for the same coverage, depending on the state.
In short, the Graham-Cassidy bill is harmful for older adults and people with preexisting conditions. It would undermine critical consumer protections, making health insurance coverage unaffordable and denying people with health conditions the care they need.
Lina Walker is vice president at the AARP Public Policy Institute, working on health care issues.
Jane Sung is a senior strategic policy adviser with AARP’s Public Policy Institute, where she focuses on health insurance coverage among adults age 50 and older, private health insurance market reforms, retiree coverage, Medicare supplemental insurance and Medicare Advantage.
Claire Noel-Miller is a senior strategic policy adviser for the AARP Public Policy Institute, where she provides expertise in quantitative research methods applied to a variety of health policy issues related to older adults.
Olivia Dean is a policy analyst with the AARP Public Policy Institute. Her work focuses on a wide variety of health-related issues, with an emphasis on public health, health disparities, and healthy behavior.