	Background

Individuals who buy coverage directly from a health insurer are often  denied coverage due to a pre-existing condition. Rating restrictions prohibit insurers in the individual market from  adjusting an individual’s health insurance premiums based on an  individual’s health status. Hypertension, Mental Health Disorders, and Diabetes Were the Most Commonly Reported Conditions among Adults, with Average Annual Expenditures for Cancer Nearly $9,000

Hypertension was the most commonly reported medical condition among  adults during 2009 that could result in a health insurer denying coverage,  requiring higher-than-average premiums, or restricting coverage with an  exclusionary rider. Our analysis of MEPS data found that about   33.2 million adults age 19-64 years old, or about 18 percent, reported  hypertension in 2009. Individuals with hypertension reported average  annual expenditures of $650 related to treating the condition, though the  maximum expenditures reported were $61,540. Mental  health disorders and diabetes were the second and third most commonly  reported medical conditions by adults age 19-64 years old. Cancer was the condition with  the highest average annual treatment expenditures, nearly $9,000 per  adult. Between 36 and 122 Million Adults in 2009 Reported Pre-Existing Conditions, Depending on the Conditions Included in the Estimates

Depending on the list of conditions used to define pre-existing conditions  in each of five estimates, we found that between 36 million and   122 million adults (age 19-64) reported having medical conditions in 2009  that could result in a health insurer denying coverage, requiring higher- than-average premiums, or restricting coverage with an exclusionary rider  (see fig. 1). This represents from 20 to 66 percent of the adult population,  with a midpoint estimate of 32 percent. The differences among the estimates can be attributed to the number and  type of conditions included in the different lists of pre-existing conditions. For example, estimate 1, which is the lowest estimate, includes adults  reporting that they had ever been told they had 1 or more of 8 conditions. All 8 conditions were designated as priority conditions by AHRQ because  of the conditions’ prevalence, expense, or relevance to policy.Estimate 3, the midpoint estimate, includes any individual who had one of  over 60 conditions commonly used to determine eligibility in state high- risk pools. Estimate 5, the highest estimate, includes any individual  reporting they had experienced any condition considered chronic during  2009. The list of chronic conditions used for this estimate included 417  separate conditions. Pre-Existing Conditions Are Common across States and Demographic Groups, but Prevalence Is Higher for Certain Populations

The number of adults with pre-existing conditions varies by state, but  most individuals with pre-existing conditions live in states that report not  having insurance protections similar to PPACA. Compared to others, adults with  pre-existing conditions spend thousands of dollars more annually on  health care, but pre-existing conditions are common across all family  income levels. We estimate that 88-89 percent of adults with pre-existing conditions live  in states without insurance protections similar to the PPACA provisions,  which will become effective in 2014. Appendix III shows the  various state protections for individuals with pre-existing conditions in the  50 states and the District of Columbia. 3). 5). Agency Comments

We provided a draft of this report to HHS for comment, but in its written  response HHS said that it had no substantive or technical comments. Identifying the Most Common Medical Conditions and Estimating Treatment Costs

To estimate the number of adults (age 19 to 64) with medical conditions  that would cause an insurance company to restrict or deny insurance  coverage and the average expenditures related to these conditions, we  analyzed MEPS data on medical conditions and expenditures.
Why GAO Did This Study

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 applicants health status and other risk factors. Beginning January 1, 2014, the Patient Protection and Affordable Care Act (PPACA) prohibits health insurers in the individual market from denying coverage, increasing premiums, or restricting benefits because of a pre-existing condition. GAO was asked to examine the effect of this provision on adults who are 19-64 years old. 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, GAO (1) identified four recent studies that narrowly or more broadly identified five lists of conditions likely to result in restricted coverage in the individual insurance market and (2) used the 2009 Medical Expenditure Panel Survey to generate five separate estimates, referred to as estimates 1 through 5. There is no commonly accepted list of pre-existing conditions because each insurer determines the conditions it will use for medical underwriting. We also contacted state insurance department officials in all 50 states and the District of Columbia to confirm information about state insurance protections that currently limit or prohibit medical underwriting.

What GAO Found

Hypertension was the most commonly reported medical condition among adults that could result in a health insurer denying coverage, requiring higher-than-average premiums, or restricting coverage. GAOs analysis found that about 33.2 million adults age 19-64 years old, or about 18 percent, reported hypertension in 2009. Individuals with hypertension reported average annual expenditures related to treating the condition of $650, but maximum reported expenditures were $61,540. Mental health disorders and diabetes were the second and third most commonly reported conditions among adults. Cancer was the condition with the highest average annual treatment expendituresabout $9,000.
Depending on the list of conditions used to define pre-existing conditions in each of the five estimates, GAO found that between 36 million and 122 million adults reported medical conditions that could result in a health insurer restricting coverage. This represents between 20 and 66 percent of the adult population, with a midpoint estimate of about 32 percent. The differences among the estimates can be attributed to the number and type of conditions included in the different lists of pre-existing conditions. For example, estimate 1, which is the lowest estimate, includes adults reporting that they had ever been told they had 1 or more of 8 conditions. Estimate 3, the midpoint estimate, includes any individual reporting they had one of over 60 conditions. Estimate 5, the highest estimate, includes any individual reporting a chronic condition in 2009.
The estimated number of adults with pre-existing conditions varies by state, but most individuals, 88-89 percent depending on the list of pre-existing conditions included, live in states that do not report having insurance protections similar to those in PPACA. Compared to others, adults with pre-existing conditions spend thousands of dollars more annually on health care, but pre-existing conditions are common across all family income levels.
The Department of Health and Human Services reviewed a draft of this report and had no substantive or technical comments.