Pacific Research Institute

Obamacare Repeal Would Not Be A Disaster

USA Today

From #MakeAmericaSickAgain — Senator Charles E. Schumer's, D-N.Y., latest catchphrase — to #CoverageMatters, Twitter hashtags have emerged as the rhetorical weapon of choice for defenders of Obamacare.

One of the latest is #the27percent, supposedly the share of Americans under the age of 65 with pre-existing conditions who are at risk of losing coverage if Obamacare is repealed, according to a new report from the Kaiser Family Foundation.

But the 140-character version of Obamacare's story leaves out a lot — including the truth. The overwhelming majority of "the 27%" are in no danger of losing coverage after Obamacare is repealed and replaced. In fact, a straightforward reading of the data reveals that the pre-existing condition crisis used to sell Obamacare to voters never actually existed.

Obamacare requires insurers to sell to all comers, regardless of their health status or history. This "guaranteed issue" provision has been quite popular among Democrats and Republicans alike.

Obamacare's defenders argue that repealing this provision will cause millions of people with pre-existing conditions to lose their coverage. The Department of Health and Human Services claims that up to half of non-elderly Americans have pre-existing conditions — and that these nearly 130 million "could be denied affordable coverage without health reform."

The Kaiser report estimates that 52 million non-elderly people — 27% of the population — have uninsurable health conditions. But even this smaller figure is an exaggeration.

For evidence, look no further than the Kaiser report itself. "At any given time," the study states, "the vast majority of these approximately 52 million people with declinable pre-existing conditions have coverage through an employer or through public programs like Medicaid."

Individuals insured through a government program have long been protected from coverage denials based on pre-existing conditions. And since 1996, the Health Insurance Portability and Accountability Act has provided that same protection to Americans insured through their employers.

So denials of coverage were only ever possible in the individual market pre-Obamacare. And repealing the law would only affect the tiny share of Americans — 8% — who get coverage in that individual market.

Even within this small segment of Americans, few were likely to face coverage denials before Obamacare. A 2010 congressional investigation found that the nation's four largest insurers denied coverage to only one in seven applicants because of a pre-existing condition.

Assuming the same denial rate in a post-Obamacare world, roughly 1% of the non-elderly population is actually at risk of losing coverage.

In other words, Obamacare upended the U.S. healthcare marketplace and drove premiums skyward for millions in order to address a problem that afflicts, at most, 1 in 100 Americans.

Even if we were to add every single uninsured American to the individual market and assume the same denial rate, the share of non-elderly people declined coverage due to a pre-existing condition would still be less than 3%. And this last calculation is generous, since it's likely that some of the uninsured population is eligible for coverage from a government program or employer.

The GOP's replacement plan will still protect those with pre-existing conditions. The plan will bar insurers from raising people's premiums significantly, provided they maintain continuous coverage. If they can't find affordable insurance on the open market, they'll be able to turn to state-based high-risk pools supported by $25 billion in federal funding over 10 years for subsidized coverage.

This network of high-risk pools will guarantee affordable coverage for those with pre-existing conditions — without raising premiums for everyone else in the general insurance pool, as Obamacare did.

The social media campaigners behind #the27percent are perpetuating precisely the false narrative about pre-existing conditions that gave rise to Obamacare in the first place. Instead of opting for #FakeNews, Obamacare's partisans should stick to the facts.

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