Half of Americans Have Pre-Existing Health Conditions

Jan. 18, 2011— -- As many as 129 million non-elderly Americans have a pre-existing health condition that puts them at risk of being denied affordable coverage without health care overhaul, according to a government report.

The estimate represents nearly half of Americans younger than 65, and 86 percent of people 55 to 64.

Secretary of Health and Human Services Kathleen Sebelius released the report hours before the House of Representatives was set to begin debate today on a Republican-spearheaded health care repeal bill.

"The timing of the report may be political but that does nothing to diminish its accuracy," said Robert Field, professor of law at the Earle Mack School of Law and professor of health management and policy at the Drexel University School of Public Health in Philadelphia.

What constitutes a pre-existing condition -- one that exists before someone applies for a health insurance policy -- is generally defined by insurers. But ones considered to fall in "high-risk pools" were also counted in the report. So pre-existing conditions ranged from having cancer to having high cholesterol.

"The administration is obviously making the case for the Affordable Care Act to the American people," said Timothy Stoltzfus Jost, professor at Washington and Lee University School of Law in Lexington, Va. "The pre-existing condition exclusion ban is popular, but most Americans do not understand how widespread pre-existing conditions are."

Under the Affordable Care Act -- part of the health care legislation passed by the last Congress and signed into law by President Obama March 23, 2010 -- insurers can no longer base eligibility, benefits or premiums on a person's health status, starting in 2014.

The act already prohibits insurers from limiting lifetime coverage to a fixed dollar amount or denying coverage to a child younger than 19 because of a pre-existing condition. As many as 17 million children younger than 18 have a pre-existing condition, according to the report.

Americans Worried About Coverage

More than one-third of those who tried to purchase health insurance directly from an insurance company in the individual insurance market were turned down, charged more or had a specific health problem excluded from their coverage, and half of those with individual market insurance were worried about losing their coverage if they got really sick, according to national surveys cited in the report.

"Insurance is the only business in which you don't know the price of your own product until after you have sold it," Field said. "The premium that a customer pays can be pure profit if they don't file any claims, or a huge loss, if they get sick. Insurance companies deal with this by limiting sales to those most likely to stay healthy."

But some experts disagree with the report's estimates.

"We have long agreed that the individual insurance market needs to be reformed but this report significantly exaggerates the number of people whose coverage is impacted by pre-existing conditions," said Robert Zirkelbach, press secretary for America's Health Insurance Plans, explaining that most people get their coverage through big employer plans (which cover pre-existing conditions) and nine out of 10 people who apply for coverage in the individual market are offered a policy.

Professor Jost said, "The administration is not arguing that 129 million Americans are ineligible for private health insurance because of their health. But many of these Americans are insured through their jobs, and would find health insurance to be very expensive or unavailable if they were to lose their employee coverage."

Five million Americans lost employer-sponsored health insurance between 2007 and 2009, according to the report. The percentage of small businesses that offer coverage dropped from 68 percent in 2001 to 59 percent in 2009, but rose in 2010; a trend the authors attribute, in part, to the Affordable Care Act's small business tax credits.

In an interview with George Stephanopoulos on ABC News' "Good Morning America," former House speaker Newt Gingrich dismissed the report, calling it "left-wing propaganda."

"These are people who claim they can cut $500 billion out of Medicare and not affect either doctors, hospitals or senior citizens. Now, I mean, if you can believe that, you can believe anything they're saying," Gingrich said of the Department of Health and Human Services.

"The administration keeps touting these insurance market reforms, which are a small part of the new law, but seem to want people to ignore the hundreds of billions in wasteful spending and regulation that is attached to the bill," said Dr. Scott Gottlieb, resident fellow at the American Enterprise Institute for Public Policy Research.

"There were a lot of ways to address the gaps in coverage that make insurance unaffordable to some Americans, short of nationalizing the regulation and reimbursement of health coverage for most Americans, which is what this legislation does."

Scare Tactics?

Theodore Marmor, professor emeritus of public policy and management and political science at Yale School of Management, called the report "a perfect example of false specificity" that uses numbers as scare tactics when "there is every reason to restrict the use of pre-existing conditions as a bar to health insurance," regardless of the number of people who would be harmed.

"There are many conditions that might be used to bar insurance," he said, "which makes any estimate, at best, an exercise in counting, not thinking."