A new report from the House Committee on Energy and Commerce has found that the top four insurers “denied health coverage to 49 percent more people in two years for reasons such as pregnancy and the likelihood of adopting a child,” resulting in some 651,000 rejected applicants between 2007 and 2009. Before the Affordable Care Act, moreover, “each company had a business plan to exclude pre-existing conditions, said the report, citing internal insurer documents the panel obtained“:
A year-by-year analysis shows a significant increase in the number of coverage denials each year. The insurance companies denied coverage to 172,400 people in 2007 and 221,400 people in 2008. By 2009, the number of individuals denied coverage rose to 257,100. Between 2007 and 2009, the number of people denied coverage for pre-existing conditions increased 49%. During the same period, applications for insurance coverage at the four companies increased by only 16%.
The report also concludes that certain medical conditions like pregnancy, surgery, or infertility treatments triggered an automatic denial, which “no longer require a review for declination.” In some cases, the companies granted coverage to sicker individuals “but used medical riders to exclude coverage or increase deductibles for the pre-existing conditions. In the case of one of the companies, nearly 15% of the company’s customers in the individual market in 2010 had policies with riders limiting coverage or increasing deductibles for certain medical conditions.”
Insurers considered these tactics standard business practices and planned on developing new ways to avoid expensive risk, the report finds:
- Increasing the look-back period on pre-existing conditions: When an individual applies for health insurance, the company will “look back” at the applicant’s prior medical history for a certain period of time to identify pre-existing conditions that could provide a justification to deny coverage.
- Assessing separate deductibles specifically for identified pre-existing conditions: In a presentation concerning risk assessments in the individual health insurance market, executives at another company were provided a “[p]re-ex opportunity overview.”
- Denying payments for prescription drugs related to pre-existing conditions: Executives for a third company have recently introduced a project to withhold insurance reimbursement for prescription drugs if the medication is used to treat pre-existing conditions.
- Linking additional claims to pre-existing conditions exclusions: During an internal evaluation of the individual business, executives at the fourth company discussed “[c]ontrol[ling] cost by conducting Pre-Existing Condition Investigations.”
- Narrowing the definition of prior creditable coverage: Prior creditable coverage is a period of past health insurance coverage that can shorten the length of time a new insurer can exclude insurance coverage of pre-existing conditions. Internal documents reveal that executives at one of the companies considered changing “the definition of prior creditable coverage to exclude prior individual coverage.”
Repealing the Affordable Care Act could leave the door open to all of these abuses, but that last point is particularly relevant since the GOP’s repeal and replace health care Pledge would only extend pre-existing conditions exclusions to individuals with prior creditable coverage. Depending on how one defines that term, it could exclude millions of Americans.