Editorial: The false promise the PROTECT Act makes on preexisting conditions

The PROTECT Act, the health insurance reform bill unveiled this week by 18 Senate Republicans, is aptly named, albeit not for the reason its sponsors suggest.

The bill pretends to be about safeguarding Americans with preexisting health conditions. But it’s really about protecting Senate Republicans from the stink caused by the Trump administration’s efforts to repeal the Affordable Care Act, also known as Obamacare.

According to the Kaiser Family Foundation, a huge number of people — more than a quarter of non-elderly Americans — have preexisting conditions of the sort that would have led insurers to deny them coverage had the ACA not gone into effect. The ACA gave people who purchase their own health insurance expansive protection against such discrimination, making comprehensive coverage available and affordable to millions of Americans who’d been either priced out or shut out by insurers.

That’s one of the main reasons the public opposed GOP efforts in the last Congress to dump the ACA. Democrats pummeled Republicans over the preexisting conditions issue in 2018, providing some of the energy behind the blue wave that swept the GOP out of the House majority that year.

In a bizarre ruling in December, however, a federal judge in Texas declared the ACA unconstitutional in its entirety. After a group of Democratic state officials appealed, the Trump administration urged the appeals court to uphold the ruling and throw out every piece of the ACA.

Trump’s move revived the debate over preexisting condition protections, reportedly to the surprise and chagrin of many congressional Republicans who did not want to have to defend themselves on this issue again. There’s little disagreement among lawmakers about the need to provide such protections; the public’s demand for them is clear. The disagreement is over how to do it.

That’s where the PROTECT Act comes in. Designed to look like a life preserver for people with preexisting conditions if the courts ruled against the ACA, it would bar insurers from denying coverage to an applicant or raising a customer’s premiums based on that person’s medical history.

But the bill’s protections are chimeric, as lead sponsor Sen. Bill Cassidy (R-La.) — a gastroenterologist who is intimately familiar with the U.S. health insurance system — has to know.

If the ACA is repealed, insurers would no longer be required to offer comprehensive policies to all comers. All the PROTECT Act would do is encourage insurers to do something they did before the ACA: offer cheaper policies with thin coverage aimed at healthy customers, and considerably more expensive policies with comprehensive coverage for people who might actually need costly care.

In other words, it would allow insurers to go back to the bad old days of segmenting low-risk and high-risk customers, then designing their policies to attract the youngest, healthiest consumers.

But that’s been the thrust of all the GOP’s healthcare efforts in recent years. Their main objection to the ACA is that, in its effort to extend insurance to millions of uninsured Americans, it raised costs for younger, healthier people, especially those whose incomes are too high to qualify for the ACA’s subsidies. Their proposed solution, however, has been to open the market to cheaper policies that cover fewer risks — often leaving consumers with much less protection than they thought they were buying.

The Trump administration has been particularly aggressive in promoting short-term policies — also known as “junk” plans — whose benefits are quite limited and often exclude coverage of preexisting conditions.

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Promoting cheaper, thinner plans may enable relatively young, healthy consumers to lower their premiums, but it inevitably raises the cost of comprehensive policies, pushing more healthcare costs onto people with preexisting conditions and risky jobs regardless of whether they currently need care. A better way to rein in Obamacare premiums would be to spread costs more broadly — for example, by having taxpayers pick up some of the tab for the most costly patients — while working more aggressively to reduce doctor and hospital bills, cut administrative costs and reduce the incentives to provide the highest volume of expensive care.

Beyond that, the PROTECT Act would do nothing to address the biggest problems that would ensue if the ACA were obliterated by the courts. About 15 million low-income Americans would immediately lose the insurance coverage they had gained through the ACA’s Medicaid expansion. Millions more would lose the subsidies they receive through the ACA that make private insurance affordable.

The result would be chaos in the market for individual insurance plans, with an enormous number of Americans left without coverage. Perhaps the sponsors of the PROTECT Act think it’s their insurance policy in case the courts ultimately throw out the ACA. But it’s not much help for anyone else.

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