Listen: Is COVID-19 a Preexisting Condition?

What could happen if we lose the Affordable Care Act during the pandemic

Many Americans have relied on the Affordable Care Act during the pandemic, but an upcoming Supreme Court case may invalidate it. With worries about the ACA looming over Amy Coney Barrett’s confirmation hearings, staff writer James Hamblin and executive producer Katherine Wells are joined on the podcast Social Distance by Karen Pollitz, a senior fellow at the Kaiser Family Foundation. An expert on the landmark health-care law, Pollitz gives them a refresher on what the ACA did—and what could happen if it goes away in the time of the coronavirus.

Listen to their conversation here:

Subscribe to Social Distance on Apple Podcasts, Spotify, or another podcast platform to receive new episodes as soon as they’re published.

What follows is a transcript of their conversation, edited and condensed for clarity:

James Hamblin: What is in jeopardy now with the case before the Supreme Court?

Karen Pollitz: The case that was filed challenges the whole Affordable Care Act.  Republican state officials and the Trump administration have filed briefs saying, Now that the individual-mandate penalty is gone, you have to throw out the entire law. All of it: the Medicaid expansion, the market reforms, the subsidies, the insurance standards. There were tons of changes across our health-care system in the ACA. And the case that’s before the Court says all of that is invalidated because this one provision no longer has a penalty.

Hamblin: And the initial challenge to the ACA in the Supreme Court was over the mandate being unconstitutional?

Katherine Wells: Yeah, I thought we already went through this. Didn’t the Supreme Court already say the law is fine?

Pollitz: It did, but the argument is that the Supreme Court ruled that because there were penalties tied to the mandate, that the mandate was really a tax provision. And Congress clearly has authority under the Constitution to levy taxes, so that was okay.

Now the plaintiffs are saying that the tax penalty is gone, so it isn’t a tax anymore. They say there’s a mandate—albeit with no penalty—but that’s still unconstitutional, and so the whole law has to come down. A lot of legal scholars look at this—even conservative legal scholars—and say that’s kind of ridiculous on its face. But that is the case that is before the Supreme Court now.

Wells: Is the likely outcome that the Supreme Court just says, “Okay, sure, we can’t have a mandate, but the law isn’t unconstitutional”?

Pollitz: I certainly won’t say what a likely outcome is—2020’s been quite a year. And now, with the Supreme Court makeup changing, nobody knows what the outcome is. At the one end, the Court could agree and invalidate the whole thing. At the other end, they could say this is stupid on its face, and dismiss the case. In between, they could say the mandate now is unconstitutional, but there’s this severability argument. Maybe the whole law doesn’t have to go, but what would have to go with it?

Earlier briefs by the Trump administration in memos to Congress suggested that those market reforms would have to go, because the mandate was gone. So the individual market could go back to turning me down because I’m a cancer survivor. Group health plans at work could go back to excluding your preexisting conditions. Group plans did that before the ACA. So that severability argument lies in between the two extreme outcomes and, honestly, nobody knows with a new Court how this might work.

I think there are arguments about the constitutionality of laws that the Congress enacts, what these laws can and can’t require, and how they have to be crafted ... All of that is wrapped up in this case right now, but for people, it just feels kind of scary. I mean, 20 million people could lose their coverage if this law gets erased. And a whole lot of us—over 50 million of us adults—could be again labeled uninsurable.

Wells: There’s such a focus on the ACA this week with the Senate confirmation hearings, because if the new justice is confirmed before oral arguments in November, she gets to be part of the decision?

Pollitz: Right. This is the third trip to the Supreme Court for the Affordable Care Act, and it’s been upheld twice before by a vote of 5–4. Now the expectation is that 5–4 is going to be harder to achieve this time.

Wells: We’ve talked about preexisting conditions. Is COVID-19 a preexisting condition?

Pollitz: It could be. It absolutely could be. Twenty years ago, I did a study of health-insurance companies that sold individual health insurance. We presented them with hypothetical applicants with a variety of heights, weights, ages, conditions, diagnoses, medications, etc. And we asked them: Would you sell these people coverage?

At the one extreme, we had a young man who had HIV, and he got turned down every time. At the other extreme, we had a young woman who was in excellent health, except she had seasonal hay fever. And she got turned down several times. She was offered coverage most of the time. But in all but a few of those offers, she was offered a policy at a surcharge premium. Okay, we’ll sell you coverage, but you’re going to pay 50 percent more than the advertised price. She got offered policies that excluded her allergies. She also got a couple of policies that excluded her entire upper respiratory system, policies that excluded the drug benefit. Medical underwriting was pretty fussy in those days. Crosswalk that to COVID-19: It’s a little trickier. This is still a new condition, and uncertainty is something that medical underwriters just hate. They don’t want to sign on and promise to pay all your claims if they’re not sure what you might need.

For now, in the first six or so months of COVID-19, we know that for most people, it’s an awful infection and uncomfortable, but it’s relatively mild. But we also know there are some folks, they may continue to have symptoms for an extended period of time and they could be severe, with long-term serious damage to the lungs, the heart, the immune system ... I think insurers would worry about that, and certainly if they saw a recent case of COVID-19, I think underwriters could act on that.

Another thing they might worry about would be people who just test frequently. Maybe they drive an Uber or they’re a cashier at a store or they deliver groceries. They’re in contact with the public a lot. They’re exposed. And they’re worried about getting sick. Just being at elevated risk for COVID-19, I think, is something that insurers would look at. In addition to being uninsurable for your health condition, insurers also had lists of uninsurable occupations. I was just looking at one of the old underwriting manuals, and on that list was “taxi driver.”

There was “coal miner” and “logger”—dangerous jobs, of course—but way before COVID-19, “taxi driver” was on the list, just because you get exposed to a lot of things. So, yeah, I think in a medically underwritten insurance market, COVID-19 could make it harder for you to get insurance. And if you were able to buy it, if you’re at risk, you may well be offered a policy that just excludes all treatment for anything related to COVID-19.