How Would Americans' Out-of-Pocket Costs Change If Insurance Plans Were Allowed to Exclude Coverage for Preexisting Conditions?

Issue: A current Republican legislative proposal would permit insurers to offer plans that exclude coverage of treatment for preexisting health conditions, even while the bill would maintain the Affordable Care Act's rule prohibiting denial of coverage to people with a preexisting condition. Goal: Estimate patients' out-of-pocket costs for five common preexisting conditions if the bill were to become law and assess any additional impact on out-of-pocket expenditures if spending on care for preexisting conditions no longer counted against plan deductibles. Methods: Analysis of 2014­2016 Medical Expenditure Panel Survey data for the privately insured adult population under age 65; and the proposed Ensuring Coverage for Patients with Pre-Existing Conditions Act (S. 3388). Findings and Conclusion: If preexisting conditions were excluded from coverage, nearly all people with these conditions would see increased out-of-pocket costs. Average out-of-pocket costs for those with cancer or diabetes would triple, while costs for arthritis, asthma, and hypertension care would rise by 27 percent to 39 percent. Some individuals would see much larger increases: for example, 10 percent of diabetes patients could expect to incur over $9,200 annually in out-of-pocket costs. Many with preexisting conditions also would spend more on conditions that are not excluded, since out-of-pocket spending on their preexisting conditions would no longer count toward the deductible and out-of-pocket maximum.