The impending decision by the Fifth Circuit Court of Appeals in the Texas v. Azar case raises the prospect that insurers will once again be able to return to using people’s health status in determining their eligibility and premiums for health insurance, at least for coverage obtained from the non-group, or individual insurance, market.  In the case, the plaintiff states’ Attorneys General and the Trump Administration are arguing that the Affordable Care Act is unconstitutionally structured and should be invalidated in its entirety.  This would include overturning provisions that guarantee that people with pre-existing health conditions cannot be denied coverage or charged higher premiums due to their health status.

Given the significant barriers to coverage that may reemerge if these provisions in the ACA were to be invalidated, we are updating our prior work looking at the share of nonelderly adults with health conditions that would likely to have caused them to be denied coverage if they applied for non-group health insurance prior to the effective date of the ACA.  And because the financial consequences of these changes would potentially affect the whole family, we extend our analysis to estimate the percent of nonelderly families with at least one adult who has one or more declinable conditions.

Consistent with our previous analysis, we estimate that 27% of nonelderly adults have a declinable health condition, which is about 53.8 million people in 2018.  We further estimate that 45% of nonelderly families have at least one nonelderly adult member with a declinable health condition.  Finally, we update our state-based estimates of the prevalence of declinable pre-existing conditions with the most current data available, showing that the share of non-elderly adults with pre-existing conditions ranges from 22% in Colorado to 37% in West Virginia.

People with pre-existing health conditions were often denied coverage or charged higher premiums for individual market coverage before the ACA took effect in 2014.  While most of people with pre-existing health conditions are covered currently by employer-based coverage or public programs, such as Medicaid, the non-group market is where they may need to look for coverage in times of transition, for example, if they lose a job, change jobs, start a business, divorce, age-off of a parent’s policy, retire before age 65, leave employment due to serious illness, get a job and lose Medicaid, or otherwise lose their eligibility for work-based or public coverage. While we cannot predict how the court would fashion relief if these ACA provisions were overturned, access to individual market insurance for people with pre-existing conditions could be seriously reduced.

Use of Health Status in Underwriting and Rating Before the ACA

Estimates of the Share of Adults with Pre-Existing Conditions