A North Carolina Democrat is accusing his Republican opponent of supporting health-care policies that don’t offer protection for people with pre-existing conditions.
That Democrat is Dan McCready, who’s running for Congress in NC’s 9th district against state Sen. Dan Bishop of Mecklenburg County. The district is Republican-leaning, but the race is considered close leading up to the Sept. 10 election.
McCready recently put health care coverage at the forefront of his campaign, highlighting legislation Bishop sponsored as an example of how the Republican would fail to protect North Carolinians.
"Sen. Dan Bishop doubles down on removing coverage for people with pre-existing conditions," McCready tweeted on Aug. 8, adding "Under (Bishop’s) sham ‘association health plans,’ insurance companies don’t have to pay for medications for pre-existing conditions."
What is McCready talking about? His tweet provided a link to a Winston-Salem Journal story about the Small Business Health Care Act, also known as Senate Bill 86. The bill was recently passed by the legislature and sent to Gov. Roy Cooper for approval.
We looked into the details of the bill and found McCready has a point about insurers being able to offer skimpy coverage as part of the proposed new health plans, but his claim about "removing coverage" for people is an exaggeration.
What are association health plans?
At the federal level, Bishop has stated that he wants to repeal the Affordable Care Act, also known as Obamacare, which protects people with pre-existing conditions. Bishop has said he wants to replace it with something better.
At the state level, Bishop sponsored SB 86. The bill aims to provide coverage for small businesses, trade associations and other groups of professionals who are in the same industry or line of work through what’s called an "association health plan." President Donald Trump in 2017 signed an executive order expanding the availability of these plans as a way of providing an alternative option who can’t afford ACA plans.
People who work for associations and other small businesses sometimes can’t offer their employees insurance because they struggle to find plans that are affordable. This bill would enable insurers to offer coverage plans to these groups that might be cheaper than ACA plans because they’re not required to provide as much coverage.
Bishop’s bill explicitly states that association health plans would be subject to the ACA’s "group health plan" requirements, which means insurers "cannot deny individuals coverage if they have preexisting conditions, cannot impose annual and lifetime limits on certain benefits, and must provide free access to certain preventative services."
But that doesn’t mean that people with pre-existing conditions would be guaranteed coverage for services they need.
There’s more than one way to deny coverage to people, said Valerie Lewis, an associate professor of health policy and management at UNC’s Gillings School of Global Public Health. Allowing insurers to discriminate at the time of enrollment is just one way, she said.
"The other way is to allow anyone to join or purchase the plan, but to have the plan provide a very limited set of benefits," she said in an email.
That’s what health policy experts say could happen under Bishop’s bill. While the ACA requires plans to cover 10 "essential benefits" — from prescription drugs and rehabilitative services to chronic disease management — association plans are subject to looser standards and aren’t required to cover those essential benefits, she said.
"As a simple example, you could allow people who have cancer to buy into the plan, but the plan might cover (pay for) zero cancer care — in effect removing coverage for the preexisting condition despite nominally allowing the person to purchase the insurance plan," Lewis said.
The Winston-Salem Journal story points out that Bishop’s bill "does not include guarantees of the essential benefits. An amendment to add the essential benefits to SB86 was tabled by a 28-20 vote in the Senate," with Bishop voting to table it.
Under the version the legislature sent to the governor, "employers could still choose between AHPs with somewhat more limited coverage and normal group insurance that has full coverage," said Mark Hall, Director of Health Law and Policy at Wake Forest University’s School of Law.
"So no group would be denied the option of full coverage," Hall said, emphasizing the word "option." But, people within a group could, and probably would, end up with less coverage for some of their pre-existing conditions."
Other potential problems
After a year of insuring a group or association, an insurer could "identify people whose claims are high" and write the following year’s coverage plan to exclude their needs, said David Anderson, a research associate at Duke University’s Margolis Center for Health Policy.
Indeed, an association plan "can be shaped so that it doesn’t attract people with certain conditions," said Kevin Lucia, a research professor at the Center on Health Insurance Reforms for Georgetown University’s McCourt School of Public Policy.
But it’s also possible insurers craft plans in order to attract people, Hughes Waren, a leader of the NC Association of Health Underwriters, told North Carolina Health News. If the associations include high-income workers, he said the associations may be incentivized to seek plans with decent benefits.
"I would have no reason to think that anybody is doing these to offer skinny plans. It’s really to provide a benefit to their members," Waren told NC Health News. "They’re going to create competitive plans that are attractive."
There’s one more factor to consider. If healthy people leave their ACA plan for an association health plan, people with ACA plans could face higher premiums the following years because there won’t be as many people to share the cost burden. Customers with pre-existing conditions are likely to be the most affected.
McCready said Bishop supported "removing coverage for people with pre-existing conditions."
That wording could give the impression that this bill directly and immediately strips health care coverage from people with pre-existing conditions. That’s not the case.
But experts point out that insurers aren’t required to offer association health plans with a full range of services for people with pre-existing conditions. The proliferation of association health plans could also affect people with pre-existing conditions on ACA plans. McCready’s claim is partially accurate but leaves out important details or takes things out of context. We rate his claim Half True.
This story was produced by the North Carolina Fact-Checking Project, a partnership of McClatchy Carolinas, the Duke University Reporters’ Lab and PolitiFact. The NC Local News Lab Fund and the International Center for Journalists provide support for the project, which shares fact-checks with newsrooms statewide. To offer ideas for fact checks, email [email protected].