Prevalence of Preexisting Illnesses

Today’s Managing Health Care Costs Indicator is 86%

A new Health and Human Services Department study, released today on the eve of the House vote on a bill to repeal the Affordable Care Act, shows that a vast majority of Americans 56-65 have a preexisting condition, which could make it difficult to obtain insurance in the individual market.

This is no big surprise.  Hypertension, depression, hyperlipidemia and diabetes are prevalent in the American adult population, and these chronic conditions increase with age.   Those who have these chronic diseases have higher costs.  Therefore, insurers have every reason to try to avoid offering insurance to those with these conditions in an environment where healthy people can choose not to pay premiums into the insurance pool.

There is some new evidence from Massachusetts in this week’s NEJM  showing that the individual mandate in Massachusetts appears to be working very well.  The heavy subsidies for those of modest means combined with the individual mandate has meant that those without chronic illnesses are indeed signing up.  Getting the healthy to join the insurance pool is critical to making insurance affordable to all.

 California had to shutter its health exchange a few years ago when it failed to attract a significant number of healthy enrollees, and cost escalation was uncontrollable.