Kansas Health Institute | Information For Policy Makers. Health for Kansans.

TOPEKA — Almost one in four Kansans under age 65 have a pre-existing medical condition that could affect their ability to buy or keep health insurance, according to a recent study by Families USA, an advocacy group representing health care consumers.

Older Kansans were found to have more pre-existing conditions than their younger counterparts.

Among those between ages 18 and 24, the rate was almost 1-in-6; between ages 45 and 54, it was more than 1-in-3; between ages 55 and 64, it was 1-in-2.

Though low-income Kansans are more likely to have a pre-existing condition, almost three-fourths of those with pre-existing conditions are in families earning more than 200 percent of the federal poverty level, more than $44,100 for a family of four.

“What this shows is that if you’re higher income, you're going to the doctor and you’re getting diagnosed,” said Kathleen Stoll, director of health policy at Families USA.

The conditions most often cited:

• Psychiatric disorders.

• Diabetes.

• Chronic obstructive pulmonary disease.

• Heart disease.

• Obesity.

• Cancer.

544,000 Kansans

The study relied on data from both the U.S. Agency for Healthcare Research and the national Medical Expenditures Survey, and demographic data from the U.S. Census Bureau.

The new federal health reform law, starting in 2014, will prohibit insurance companies from denying coverage, charging higher premiums or eliminating coverage due to a pre-existing condition.

In a statement that accompanied the study, Families USA Executive Director Ron Pollack said reform will protect “all these individuals from the most harmful insurance company abuses that deny critical coverage.”

According to the study, 544,000 Kansans have a pre-existing condition.

More than one-third of these Kansans are thought to have health insurance.

Suzanne Cleveland, a senior analyst at the Kansas Health institute, said not all of the 544,000 are at risk of being denied coverage.

A recent Kansas Health Institute survey found that about 340,000 Kansans are uninsured.

“I understand what the Families USA study is saying – that these 544,000 could be at risk – but it should be pointed out that about 204,000 of these people do have coverage,” Cleveland said. “I guess it depend on how you define at-risk.”

Stoll defended Families USA’s conclusions.

“If you happen to lose your job you’re at risk of not being able to afford coverage and of ending up in the individual market where you can be denied coverage because of a pre-existing condition. So, yes, you may have coverage (now),” she said, “but you’re still at risk.”

In Kansas, insurance companies are free to deny someone individual-market coverage due to a pre-existing condition. But someone who’s covered through an employer’s group policy cannot be denied.

Couple of problems

“Group policies have protection,” said Kansas Insurance Commissioner Sandy Praeger. “But on the individual market, you can be denied for having high blood pressure, for asthma, for allergies – things that aren’t really considered a pre-existing condition.”

Praeger, a past president of the National Association of Insurance Commissioners, said she’s long been opposed to insurance companies denying coverage due to a pre-existing condition.

“Of all the provisions in the health reform law, the one on pre-existing conditions is the most important,” she said. “But there are a couple of problems.”

In an effort to control premium costs, the new law, Praeger said, says an older person’s premium can’t be more than three times what a young person is expected to pay.

Because an older person’s health care costs are higher than a young person’s, she said, insurance companies will have to raise young people’s premiums to recoup their costs.

“My concern is that this will drive up the costs for the younger folks who will do the math and see that it’s cheaper to just go ahead and pay the penalty,” Preager said. “If they can’t be denied because of a pre-existing condition, there really isn’t anything to stop them waiting until they get sick to buy insurance. That’s an issue that needs to be addressed and I think that’s reinforced by what’s in the Families USA report – the fact that older people have so many more pre-existing conditions than younger people.”

Praeger said she and the insurance commissioners’ association pushed for a 1-to-5 “rating ratio” rather than the 1-to-3 ratio that passed.

“In the first year, the penalty is $96,” she said. “I can guarantee you that first-year age rating for the younger folks will be considerably more than that.”

Stoll defended the 1-to3 ratio.

“As much as we respect Sandy Praeger, we have a difference of opinion,” she said.

“This is a balancing act between helping people as they get older not to get priced out of affordable insurance and at the same time allowing premiums to be lower for those coming into the risk pool,” she said. “We feel the (3-to-1 ratio) is the right balance.”