Some Question Administration’s Claim That 129 Million Americans Could Be Denied Coverage Because of Pre-Existing Condition

January 28, 2011 - 6:24 AM

Washington (AP) - It's a striking statistic: Without President Barack Obama's health care law, as many as 129 million Americans -- half of those under age 65 -- could be denied coverage or charged more because of a pre-existing medical condition.

The new estimate by the Health and Human Services Department is more than twice as high as a figure that supporters of the law were using last year.

It just might need an asterisk.

Most of those millions of people are covered by health insurance at work and don't face any immediate risk of being denied care for their pre-existing medical problems. And as a rule, those who take a new job and sign up in their employer's health plan are already protected by a 1990s law.

"It's a hypothetical situation, not an actual situation," said economist Paul Ginsburg, president of the Center for Studying Health System Change. "Most of these people don't have a problem, with or without health reform, because they get their coverage through their employment, and employer coverage takes everybody."  The center is a nonpartisan research organization.

The administration's estimate was released Jan. 18, just ahead of a vote to repeal Obama's health law in the Republican-led House. Without the law, up to 129 million people with health conditions like heart disease, high blood pressure, arthritis or cancer would be at risk of losing health insurance when they need it most or being denied coverage altogether, HHS said.

"It's like trying to estimate hurricane fatalities by the number of people living on the seashore," said Edmund Haislmaier, a health policy expert with the conservative Heritage Foundation. Most people in the path of a hurricane would evacuate, some would hunker down in reinforced homes; only a fraction would face the worst consequences, said Haislmaier.

"People are not going to suddenly face losing coverage if you repeal this law," he added. The Heritage Foundation supports repeal.

The Obama administration stands by the statistic.

It shows why repealing the law would be "a huge mistake," Health and Human Services Secretary Kathleen Sebelius told reporters. Almost half the population could be discriminated against because of a pre-existing condition, she added.

The law forbids health insurers from turning down people with health problems or charging them more. That guarantee takes effect in 2014, along with federal subsidies and a Medicaid expansion that will provide insurance to more than 30 million now lacking it. To prevent healthy people from staying out of the pool, most Americans would be required to carry coverage.

Yet people with job-based coverage are already protected when they switch employers and health plans. A 1990s law limits waiting periods for pre-existing conditions and requires the new employer to give credit for coverage under the previous plan, eliminating the wait in many cases.

There's still a significant a gap in the safety net.

People who leave or lose jobs that come with health insurance can be turned down or charged more if they are in poor health and try to purchase coverage as individuals.

"We know of many people who stay in the jobs they're in because of the health insurance coverage," said Ginsburg.

An investigation by House Democrats last year found that from 2007 to 2009, the four largest for-profit insurers rejected more than 650,000 people based on their medical history.

The administration's estimate actually used a range of 50 million to 129 million people with pre-existing conditions.

The lower number is based on a count of people with health problems that would qualify them for coverage through state high-risk pools for those rejected by private insurers. It works out to about 1 in 5 of those under age 65.

The higher number includes people with common health conditions such as asthma and obesity listed by insurers in their own coverage guidelines as warranting higher premiums, exclusion of coverage for a particular illness or denial, HHS said.

Last year, a group that strongly supports the health care law commissioned a research firm to estimate the number of people who could potentially benefit from the ban on denying coverage to those with pre-existing conditions.

The Families USA study found that a little more than 57 million people under age 65 have medical problems that could lead to denial of coverage if they tried to purchase a plan individually.

That's close to the lower end of the administration's estimate.