In recent discussions surrounding health insurance, there has been a resurgence of claims suggesting that individuals can easily secure their own health coverage for less money and with better benefits, harkening back to pre-Affordable Care Act (ACA) rhetoric. However, a historical examination reveals that this notion led to a multitude of problems that many Americans experienced firsthand before the ACA was implemented.
Before the ACA, insurance companies touted the idea of consumers taking personal responsibility by shopping around and obtaining their own policies. Unfortunately, the reality was starkly different. Approximately 18% of applicants were outright denied coverage, not due to reckless behavior, but because of minor health issues like sinus infections or prior medical treatments. For those who did manage to obtain insurance, the process known as “medical underwriting” involved grueling documentation of every health-related incident in recent years, as insurers assessed whether the individual represented an acceptable risk.
If one was fortunate enough to gain coverage, the cost was often exorbitant. Premiums could skyrocket for individuals with conditions such as cancer or diabetes — leading to costs that could dwarf standard rates. The financial burden didn’t stop there; coverage for essential services, including maternity care, mental health support, and prescription medications, was often not included unless additional premiums were paid.
Once insured, many people discovered the limitations of their policies. Before the ACA, a staggering 62% of individual market plans did not cover maternity care, while 34% excluded substance use treatment altogether. Additionally, lifetime limits were widespread — 89% of individual market plans had caps that would cut off benefits after reaching a specified amount, often leaving individuals financially devastated when faced with serious medical emergencies.
The conundrum was particularly severe for those with pre-existing conditions. An estimated 27% of non-elderly adults were ineligible for coverage due to such conditions, encompassing anything from asthma to obesity. This left millions vulnerable; for instance, a mother’s newborn was denied coverage for a common condition, forcing the state to shoulder an unexpected $90,000 surgical bill when complications arose.
The implementation of the ACA in 2014 marked a substantial shift in this landscape. The law prohibited denial of coverage based on pre-existing conditions, removed lifetime and annual caps, and mandated coverage for a range of essential health benefits, ensuring that every American had access to basic healthcare needs without facing financial ruin.
Despite insurance companies being labeled as “fat cats,” the ACA also introduced a Medical Loss Ratio rule, requiring insurers to allocate at least 80% of premium dollars towards actual medical care. This regulation fundamentally altered the way insurers operated, ensuring that a significant portion of premiums contributed to patient care rather than administrative profits.
The potential repeal or significant alteration of the ACA could bring back the troubling practices of the past, including discrimination based on health history, exclusion of critical services from plans, and a lack of limitations on out-of-pocket costs. Research indicates that over 109 million Americans would be adversely affected by the removal of ACA protections.
While the ACA is not without its flaws, including high premiums and restrictive networks, reverting to the pre-ACA system would likely lead to disastrous consequences for many, highlighting the need for a fair and effective healthcare system rather than a return to previous failures.
