People With Pre-Existing Conditions Would Pay More Under GOP Health Plan

Posted November 3, 2009 at 3:14pm

Updated: 5:03 p.m.

People with pre-existing medical conditions would pay up to 50 percent more than average for insurance coverage under a draft version of House Republicans’ health care plan.

A final version of the long-awaited GOP health care reform measure is expected to be released soon.

According to the draft, states would face a massive, partially funded mandate to subsidize high-risk insurance pools to cover people denied coverage by insurance companies with “a stable funding source.— Those rates would be capped at 50 percent higher than average premiums for standard-risk insurance in a given state.

The GOP plan includes $15 billion to aid states in paying for those pools over the next decade, and illegal immigrants would be prohibited from participating.

Most states already have such pools, but they often include significantly higher premiums and have not made much of a dent in the tens of millions who are uninsured.

Republicans noted that millions of people with pre-existing conditions who cannot now get any coverage would have an option to buy coverage under their plan.

The Republican proposal adopts some insurance reforms pushed in the Democratic plan, including a ban on lifetime limits on benefits and a prohibition on insurance companies cutting off individuals who become sick unless a person commits fraud or conceals a medical condition. The GOP plan also allows children to stay on their parents’ plans through age 25; the Democratic bill allows children to stay on their parents’ plans until age 27.

But the Republican measure has no limits on annual out-of-pocket costs, nor does it provide any direct assistance for uninsured people to buy insurance. Most comprehensive GOP alternatives had included tax credits for poor and middle-class people as a key pillar, but Minority Leader John Boehner (R-Ohio) rejected that as too expensive.

GOP leaders have argued that their plan would reduce costs, which will make it cheaper and easier for people to buy insurance.

States would get bonuses if they are able to reduce health care premiums and reduce the number of uninsured.

The plan also includes the ability for small businesses to band together to negotiate for lower prices and allows people to buy insurance policies across state lines to bypass state insurance mandates. It also limits medical liability lawsuits by capping noneconomic damages at $250,000 and makes a federal ban on funding abortions permanent.

It was not immediately clear how the Republican bill would be paid for, although caps on medical malpractice have previously been scored as saving tens of billions of dollars.

A Congressional Budget Office score is expected to be released once Republicans release their final bill. Republicans said that tweaks were still being made to their plan in recent days.