At that time, the Affordable Care Act had been passed, but most of its key provisions hadn’t kicked in. Insurers could charge different prices to customers, depending on their health history. And patients who were shut out of the traditional market had access to a high-risk pool.
Researchers at the Kaiser Family Foundation studied an “underwriting guide” that the insurance company Anthem used back then to sell health plans in Indiana, Kentucky and Ohio. The guide explained how people could apply for health insurance, and how their prices might change, depending on their answers to questions.
There were a lot of questions. In addition to a multi-page form, asking about prior diagnoses, prescriptions, height, weight, occupation and other details, many customers were asked to fill out supplementary questionnaires about their health problems. Anyone who answered “yes” to a question about a history of allergies, for example, would get follow-up questions — and sometimes be asked for more medical records or a doctor’s note.
Customers were slotted into different categories, depending on their answers. The most healthy were called “Super Preferred,” and could get a 7 percent discount on the standard premium. The least healthy were called “Modified 5,” and were charged three times the standard rate. (This was at a time when anyone receiving treatment for, say, acne or osteoarthritis, or with blood cholesterol above 260, could be denied coverage altogether, so least healthy was relative.)
Height and weight calculations also affected premium prices, and not just for adults. If your child was 3 feet 2 inches tall and weighed more than 62 pounds, the price of insurance would rise.
Some plans would make you get a physical if you hadn’t been to the doctor in a while.
The only way to find out the price of a given plan was to fill out all the forms, and wait for an answer. Other insurers had different questions and different cutoffs for price changes. And the various plans, freed from standard benefit requirements, often covered substantially different health services.
This system was tedious for everyone, but ended up being a pretty good deal for the super-preferred customers of the world. If you were fortunate enough to have required little medical care in the past, and you didn’t smoke, or you didn’t weigh too much or didn’t work a dangerous job, you could buy insurance that was less expensive than what you can find today in many markets.
People with health problems, even relatively minor ones, often paid much higher prices. And insurance tended not to cover services not required by states — like addiction treatment or pregnancy care.
For the patients with conditions that typically knocked them out of the standard market — those with H.I.V., cancer or M.S. — there was the state-run high-risk pool. But those insurance plans, designed for very sick and very costly patients, often included high costs, waiting periods and exclusions. As my colleague Reed Abelson wrote recently, many states ran out of money before they could accommodate all the sick patients.
The latest House health plan looks very much like a proposal that the more libertarian Freedom Caucus discussed with the White House a few weeks ago, which spooked many moderates. The key differences are the requirement that waiver-obtaining states maintain high risk pools and a rule that men and women be charged the same prices, assuming, of course, that their health histories are identical.
In states with waivers, the health insurance market of the future might look substantially like the market of the past, where buying health insurance meant jumping through various hoops and where sicker patients struggled to find affordable coverage.
The changes in the newly proposed amendment would be layered atop the existing Republican bill, the American Health Care Act, which the Congressional Budget Office has estimated would cause 24 million fewer Americans to have health insurance within a decade.
The bill would also substantially reduce federal funding for state Medicaid programs, and revamp the federal subsidy system used to make insurance affordable for middle-income Americans who buy their own coverage. The bill would make insurance more expensive for Americans who are poorer and older, but more affordable for people who are younger and richer.
With the newly proposed changes, the shifts would not just be from old to young and poor to rich, but also from sick to healthy. Tom MacArthur, an author of the proposal and a co-chairman of the centrist House Tuesday Group, wrote on Facebook that the proposal “protects pre-existing conditions.” It would do so only in a very limited sense.