Preexisting conditions: Two of the most hated words in health care.
Before Congress passed the Affordable Care Act in 2010, health insurers could deny you coverage, or charge you more, if you had a preexisting condition. So if you were a cancer survivor or diabetic or asthmatic, you paid dearly if you needed to change insurance or were getting it for the first time. Or you went without.
President Trump evidently thinks those were the good ol’ days of health insurance. The ACA prohibited insurers from charging more or denying coverage for preexisting conditions, which was one of the most favored provisions of an otherwise unpopular law. But Trump has now maneuvered to invalidate that portion of the law, which, if successful, would once again allow insurers to charge premiums based on how sick or healthy the patient is.
In an unusual court filing on June 8, the Justice Department argued that certain elements of the ACA are unconstitutional, while also saying it would no longer enforce the part of the law that prohibits higher premiums for patients with preexisting conditions. The Justice Department joined Texas and several other Republican-controlled states that filed a suit in February attempting to overturn key provisions of the ACA, and by extension, the entire law. It’s rare for the Justice Department to say it won’t enforce federal law. Attorney General Jeff Sessions said President Trump approved the new policy.
Insurers probably won’t make any changes right away. At a minimum, they’ll wait for a ruling in the case, most likely due later this year. If the plaintiffs prevail, there are likely to be appeals and countersuits. And even if Trump and Texas ultimately prevail, the matter could remain legally murky, unless Congress formally overturns the ACA.
A top concern for voters
As a political matter, however, Trump’s willingness to leave sick patients gasping for coverage seems like a political gift to Democrats hoping to retake control of Congress in the midterm elections this November. Health care is a top concern among voters, especially with the economy booming. Voters who might ordinarily worry more about the availability of jobs or the cost of food are instead focused on the cost of insurance, out-of-pocket expenses and now, new moves that could restrict access to care for those who need it most.
Trump seems to think everything about the ACA is terrible, and expect voters to applaud the more he tries to dismantle it. But the ACA has actually grown in popularity as Trump has attacked it and Congress has tried to repeal it. When Trump was elected, only 43% of Americans had a favorable view of the ACA. The law’s favorability rating peaked at 54% earlier this year and is now at 49%. The portion with an unfavorable view is now 43%.
Critics of the ACA blame the law for rising costs throughout the health care system, but this is largely a misperception. Health care costs have been rising two to four times as fast as overall inflation since the 1980s, a trend that continues today. There are many causes: bad incentives that encourage more care instead of better care, layers and layers of middlemen, exorbitant spending in the late stages of a patient’s life, excessive lawsuits, and so on. The ACA didn’t improve much of that, but didn’t make it much worse, either.
There’s one slice of consumers who do suffer because of the ACA: The 7 million or so people who must purchase insurance through the individual market, because they’re not covered by an employer, and who earn too much to qualify for subsidies under the ACA. Yahoo Finance and other news organizations have regularly detailed the outlandish premiums and other costs such patients bear, which can easily top $30,000 per year for a couple, just for insurance. Patients over 50 pay the most, with many desperate to reach 65, when they finally qualify for Medicare.
Republicans have already ceded health care to Democrats as a campaign issue, thanks to their clumsy efforts to repeal the ACA, with no reasonable backup plan to help the 15 million to 20 million who would end up uninsured. And now Trump is daring Democrats to demagogue the issue even further, with the new Justice Department policy that would essentially throw sick people under the bus.
Will Democrats capitalize on the opportunity? Or bungle it? Either seems possible. The leading health care policy gaining traction with Democrats is Bernie Sanders’s “Medicare for all” idea, which would allow entry to the popular health care program for seniors to anybody who wants it.
Only one problem: Sanders has never said how he’d pay for the massive expansion of a program that’s already one of the costliest on the government’s books. As is, Medicare gets its funding from a 2.9% payroll tax, split evenly between workers and employers. And that’s not enough: A new government report predicts that Medicare will start to run short of funds in 2026, and that will happen earlier if there’s a recession that cuts into expected federal tax revenue. The obvious way to cover rising Medicare costs, especially if the programs gets bigger, is to raise the tax that pays for it. Democrats touting Medicare for all might whisper that part, or fail to mention it at all.
There are other proposals that would offer some people some relief. Trump plans to allow new types of limited health plans that would cost less than traditional insurance. But such plans offer limited benefits and don’t cover pre-existing conditions, so only healthy people would buy them. That would leave more sick people in the broader insurance pool, which would push those premiums even higher, with the worst pain borne, again, by people buying individual policies without ACA subsidies.
Democrats in Congress have developed other proposals that would patch some of the gaps in the ACA, and lower costs for those dealing with the heaviest health insurance burden. But few Republicans support such legislation, because most of them have taken an all-or-nothing approach to repealing the ACA—just like Trump. All-in-all, there will be a lot of jabbering about health care on the campaign trail this fall. Action will be harder to come by.