By Nellie Bristol, CQ HealthBeat Associate Editor
April 30, 2012 -- Anywhere from 20 percent to 66 percent of American adults have a preexisting condition that could preclude them from insurance coverage or make their premiums escalate, particularly in the individual market, the Government Accountability Office said in a new report.
The wide range in the percentages stems from the variations in the way insurers classify what is a pre-existing condition for their underwriting procedures, the watchdog agency said. The low estimate, for example, comes from a study that includes eight possible preexisting conditions. The high estimate takes into account 417 separate conditions. Using four different studies, GAO estimated a midpoint of 32 percent of the adult population as having a preexisting condition based on 60 conditions commonly used to determine eligibility for state high-risk pools. "Each insurer separately determines which conditions will result in restricted coverage in the individual insurance market, so lists of conditions may not be consistent from insurer to insurer," the agency said. A preexisting condition is a health issue an individual had before he or she applies for or enrolls in a new health insurance policy.
The GAO listed hypertension as the most commonly reported medical condition in the study. The analysis found that 33.2 million adults age 19 to 64, about 18 percent, reported having hypertension in 2009. Mental health disorders and diabetes were the second and third most commonly reported medical conditions. About 10.3 percent of adults reported mental health conditions, and 6.4 percent reported diabetes. Preexisting conditions were more common among women, whites and those with public insurance, the study found.
About 2.3 percent of adults reported having cancer. But the GAO reports that that only takes into account the reporting year, not those who may have had the condition in the past. "Therefore, the number of adults who have ever had cancer is higher than the approximately 4.2 million reporting cancer in 2009," the agency says. "Health insurers commonly look at both current medical conditions and conditions an individual was treated for or diagnosed with in the past when making a decision whether and at what price to offer health insurance coverage." Cancer had the higher average annual treatment expenditures of all the conditions, about $9,000.
Senate Democratic leaders, including Majority Leader Harry Reid of Nevada and Finance Committee Chairman Max Baucus of Montana, requested the report. Starting on Jan. 1, 2014, the health care law (PL 111-148, PL 111-152) prohibits insurers in the individual market from denying coverage, raising premiums or restricting benefits because of a pre-existing condition. While group health plans are less likely to base coverage on preexisting medical conditions, individual plans often do, GAO said. In 2010, 14.6 million adults age 18 to 64 bought coverage directly through the individual market, it adds.
While the number of people with preexisting conditions varies by state, GAO says 88 to 89 percent of adults live in states without insurance protections enacted by the health care overhaul. GAO notes that 19 percent of applicants in the individual market were denied enrollment in the first quarter of 2010 and 25 percent of insurers had coverage denial rates of 40 percent or higher.
The health care law established a temporary national high-risk pool known as the Pre-Existing Condition Insurance Plan. It offers coverage to individuals with preexisting conditions who have been uninsured for six months. The program ends in 2014, when guaranteed issue and adjusted community rating requirements go into effect.