Pre-existing conditions can cost you, even if you don't know about them yet

Peter LaFrance was getting winded.

The 57-year-old plumber initially dismissed his shortness of breath as an inevitable consequence of getting older and having smoked as a younger man. But when his symptoms worsened in early 2017, he went to his doctor, who told him to go to the hospital immediately. There, he learned the problem was more serious than he thought: heart failure and Type 2 diabetes.

The situation became even more dire months later, when the bills for tests and scans during his nearly weeklong hospital stay came and his insurance plan refused to pay, leaving him with $35,000 in medical debt.

Even though he had just been diagnosed, heart failure and diabetes, according to his plan, were pre-existing conditions.

Once a common practice, the Affordable Care Act banned major medical plans from denying coverage for pre-existing conditions, or medical issues that existed before enrollment. But LaFrance didn’t have major medical insurance. He’d mistakenly purchased short-term limited-duration insurance, a type of plan that has become more readily available under the Trump administration. It’s less expensive, but also less regulated, and is allowed to refuse to pay for services related to pre-existing conditions.

More than a quarter of Americans under 65 have something that could be considered a pre-existing condition — anything from acne to Alzheimer’s disease can count, regardless of whether you knew you had it. And, as LaFrance’s experience shows, insurers who are not required to cover pre-existing conditions may go to surprising lengths to avoid paying up.

“They basically said I should have known I had diabetes and congestive heart failure. I should have been a doctor and diagnosed myself,” said LaFrance, who lives in Avondale, Chester County.

Millions more people could one day find themselves in LaFrance’s position. A lawsuit seeking to overturn the ACA would, among other things, eliminate pre-existing condition protections for people who buy individual health plans and weaken protections for the nearly half of people who get insurance through an employer.

Though legal experts say the lawsuit’s argument is weak, they caution against ignoring the threat it poses.

“The arguments are truly outlandish, but we live in a time when even outlandish arguments can sometimes win the day,” said Nicholas Bagley, a professor at the University of Michigan Law School who specializes in health law.

They can look for anything’

LaFrance didn’t realize some health plans could deny coverage for pre-existing conditions and had no idea he’d bought such a plan.

When his health plan premium shot up to almost $1,000 a month, he’d gone online to search for a more affordable option. The Golden Rule Insurance plan he found seemed to cover his needs at about $300 a month.

Brokers are required to tell their clients when they’re buying a plan that isn’t comprehensive health insurance, but crafty sales pitches often gloss over those details.

The list of medical issues that can count as a pre-existing condition is much longer than most people realize and isn’t limited to your health status the day you enroll. Insurance companies that aren’t required to cover pre-existing conditions get two chances to skip out on payment, said Karen Pollitz, a senior fellow at the Kaiser Family Foundation.

During the enrollment process, insurers screen for so-called “declinable medical conditions” — issues serious enough to disqualify someone from being accepted in the plan at all. Cancer (even years in remission), arthritis, kidney disease, mental health disorders, pregnancy and obesity were commonly considered reasons for denying enrollment in individual health plans prior to the ACA, according to research by the Kaiser Family Foundation.

For those deemed healthy enough to enroll, insurers get a second shot at denying coverage when a big bill comes in, she said. They can dig into a member’s medical history to search for signs that an issue has been brewing, or even just that risk factors were present.

Often unknown

LaFrance hired a lawyer to help him appeal, arguing that something he didn’t know about couldn’t possibly be a pre-existing condition.

He was denied again.

LaFrance’s plan defined a pre-existing condition as one for which a customer received care within 24 months of enrolling in the policy or that caused symptoms that an “ordinarily prudent” person would have gotten checked out in the past 12 months, according to the June 2017 denial letter he received.

Golden Rule’s review of his medical history showed he had experienced shortness of breath and chest pains in the past, which meant his heart failure was pre-existing.

“Given the duration of symptoms and severity, an ordinarily prudent individual would have sought medical care, advice or treatment,” the insurer wrote in its denial letter.

Many people have Type 2 diabetes and don’t realize it until symptoms worsen. But since Type 2 diabetes is related to heart failure, that was considered a pre-existing condition, too.

A spokeswoman for UnitedHealthcare, which owns Golden Rule, acknowledged that these plans are not for everyone.

“Short-term, limited duration insurance helps increase choice and coverage by providing a broad portfolio of low-cost options that meet the unique needs of individuals. These policies are not right for everyone and we work to ensure consumers have the information they need to make the right decision based on their circumstances,” said Maria Gordon Shydlo, a spokeswoman for UnitedHealthcare, in a statement.

Considering your current health when buying an insurance plan is one thing, but it can be hard to know what health problems you may develop in the future.

“There were clues, but none that I picked up on,” LaFrance said.

It’s common for people to not realize their heart has been deteriorating until they are diagnosed with heart failure — that’s why they go to the doctor, said René Alvarez, director of cardiology at Jefferson Health.

Heart failure is increasingly common and very expensive, accounting for about 20% of Medicare expenses, Alvarez said.

Lawsuit threatens ACA

If successful, the latest legal challenge to the ACA could expose millions more Americans to exorbitant costs. The lawsuit, brought by Texas and a group of Republican attorneys general, seeks to overturn the ACA, including its requirement that individual health plans cover pre-existing conditions.

Many more people who were able to get Medicaid, the government plan for people with low incomes that was expanded under the ACA, would lose that coverage. They — and their pre-existing conditions — would have to return to the individual market for insurance, if they could afford it.

A circuit court judge is expected to rule on the case soon, though legal experts say the case could go to the Supreme Court.

Protections for the roughly 165 million people with employer health plans could also be at risk.

Before the ACA, employer health plans covered pre-existing conditions but were allowed to delay coverage for up to six months after an employee changed jobs, and could cap the amount they’d spend on certain medical issues. The ACA eliminated these gaps.

“We’d be back in a world where plans would be scouring to find any sort of misstep to take away coverage after the fact,” Bagley said.

His insurance appeal defeated, LaFrance was out of options. He borrowed from his 401(k) to pay off his medical debt and canceled the Golden Rule plan, going without insurance several months, until healthcare.gov’s fall enrollment period, which continues through Dec. 15 for 2020 coverage.

Since the beginning of 2018, LaFrance has been enrolled in an ACA marketplace plan. It costs about the same as his short-term plan because he qualified for an income-based tax credit.