Individuals who buy coverage directly from a health insurer are often denied coverage due to a pre-existing condition during a process called medical underwriting, which assesses an applicant’s health status and other risk factors. Beginning January 1, 2014, the Affordable Care Act (ACA) prohibits health insurers in the individual market from denying coverage, increasing premiums, or restricting benefits because of a pre-existing condition. The Government Accountability Office (GAO) examined the effect of this provision on adults who are 19-64 years old in a new report released today. GAO examined (1) the most common medical conditions that would cause an insurance company to restrict or deny insurance coverage for adults and the average annual costs associated with these conditions, (2) estimates of the number of adults with pre-existing conditions, and (3) the geographic and demographic profile of adults with pre-existing conditions. To address these three issues...

The Affordable Care Act appropriated $5 billion to create the Pre-Existing Condition Insurance Plan (PCIP) program, which provides insurance for such individuals until new protections take effect in 2014. 27 states opted to run their own PCIPs, while 23 states and the District of Columbia opted to let the Department of Health and Human Services (HHS) run the PCIPs for their residents. Through their study "Pre-Existing Condition Insurance Plans: Program Features, Early Enrollment and Spending Trends, and Federal Oversight Activities," the U.S. Government Accountability Office (GAO) examined 1) PCIP features, premiums, and criteria for demonstrating a pre-existing condition, 2) trends in PCIP enrollment and spending, including administrative costs, and 3) federal oversight activities. The GAO found that state and federally run PCIPs generally had similar cost sharing arrangements. Coverage limits were common but varied, both in terms of the benefits affected and the extent of the limits. Monthly premiums ranged considerably and were generally higher in the federally run PCIP. Enrollment and spending for state and federally run PCIPs have been significantly lower than initial projections. Spending was also lower than anticipated.