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What Are Pre-Existing Conditions and What Would the GOP Bill Do?

A young lawyer who died after a prolonged seizure. A young woman who died of cardiac arrest. Diabetes patients who cannot get insulin. Dr. Leana Wen said cases like these will happen again if the new version of the American Health Care Act (AHCA) passes Congress.

All these patients had what the insurance industry calls pre-existing conditions — diseases, injuries or conditions that affected a patient before he or she got a health insurance policy.

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Doctors say the new health care bill could have dire consequences for patients with pre-existing conditions. Joe Raedle / Getty Images

"Right now, the Affordable Care Act protects those with pre-existing conditions," said Wen, who was an emergency room physician before she became Baltimore city health commissioner. That would change under the AHCA.

"States could allow insurers to set much higher rates for patients who have a pre-existing condition. That's terrifying, because patients could in essence be priced out of coverage," Wen told NBC News.

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Pre-Obamacare, health insurers routinely refused to cover people for such conditions, or charged extremely high premiums, co-pays and deductibles.

Companies argued it was the only way to prevent people from waiting to buy insurance until they were already sick. Some supporters of the AHCA say it's about personal responsibility. After all, why should all the customers of a health insurance plan pay for people who wait until they are sick or injured to buy coverage?

But medical groups from the American Medical Association to the Juvenile Diabetes Research Foundation (JDRF) say health insurers often made up their own definitions of pre-existing conditions. And they often denied coverage to people born with such conditions, or who developed them in childhood.

"The bill ... allows insurers to go back to putting annual and lifetime limits on coverage, meaning that a premature baby on private insurance could exceed her lifetime limit on coverage before she even leaves the hospital," the American Academy of Pediatrics said.

"For many years, the type-1 diabetes community had to battle with insurers that were allowed to deny coverage or charge significantly more to cover people with pre-existing conditions and we want to ensure that our community does not have these same battles in the future," JDRF said in a statement.

The 2010 Affordable Care Act changed that by requiring health insurance companies to accept everyone who applied for coverage. In return, the ACA required that just about everyone get health insurance or pay a special tax.

The idea is to mix healthy people together with sicker people, with everyone paying premiums, so that the companies have enough money to pay out everyone's claims.

Before Obamacare, pre-existing conditions that cost people coverage, or led to very high premiums, included:

  • Pregnancy
  • Diabetes
  • Heart disease
  • Genetic conditions
  • Injuries
  • Epilepsy
  • Cancer
  • Mental disorders

Wen said she saw the fallout on a daily basis.

"I remember seeing a patient in his mid-20s who had a seizure disorder," she said. "He would have had to pay like $8,000 a month for health insurance. "

The man, a lawyer with young children, had to go without health coverage, which meant he could not get medications to control his seizures. "He ended up in the ER one day after having a seizure for an hour. We couldn't stop the seizure for another hour," Wen recalls.

He never came out of his coma.

Wen described the case of a young woman with a congenital heart condition, also in her 20s, who was refused health insurance coverage. "She stopped taking her medications, and came in while in cardiac arrest," Wen said. "This is literally a life or death issue."

The new version of the AHCA doesn't specifically allow insurers to refuse coverage to anyone. It lets states — which regulate health insurance — ask permission to opt out of the requirement, with the Health and Human Services Department deciding who can do it.

It also allows states to set up so-called high-risk insurance pools, which are policies to cover people with pre-existing conditions who find it too hard to get health insurance. And it provides federal money to help states pay for them.

But experts say high-risk pools never worked before.

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"High-risk pools are not a new idea. Prior to the enactment of the Affordable Care Act, 35 states operated high-risk pools, and they were not a panacea for Americans with pre-existing medical conditions," American Medical Association (AMA) President Dr. Andrew Gurman said.

"The history of high-risk pools demonstrates that Americans with pre-existing conditions will be stuck in second-class health care coverage — if they are able to obtain coverage at all."

Other groups agreed.

"Previous state high risk pools resulted in higher premiums, long waiting lists and inadequate coverage," a coalition of 10 medical groups, including the American Cancer Society Cancer Action Fund, the American Diabetes Association and the National MS Society, said in a joint statement opposing the AHCA.

"State high-risk pools featured premiums above standard non-group market rates — with most states capping them at 150 percent to 200 percent of standard rates. Many also featured high deductibles, some $5,000 or more," the nonpartisan Kaiser Family Foundation said in a statement.

Related: Obamacare Creators Tell GOP We Told You So

"Almost all high-risk pools imposed lifetime limits on covered services, and some imposed annual limits," it added. "Some states capped or closed enrollment." Overall, these high-risk pools lost $1.2 billion in 2011.

Health consultancy firm Avalere released an estimate Thursday showing that the $23 billion allocated by the new AHCA to help cover people with pre-existing conditions would only pay for 110,000 of them. "Approximately 2.2 million enrollees in the individual market today have some form of pre-existing chronic condition," Avalere says in its report.

"Given the amount of funding in the bill, the program can only afford a few small states to opt into medical underwriting," said Caroline Pearson, senior vice president at Avalere. "If any large states receive a waiver, many chronically ill individuals could be left without access to insurance."

There's another reason medical groups oppose the new AHCA. It would let states ask to redefine "essential benefits" — the conditions that must be covered by plans.

"The Affordable Care Act included emergency services as an essential health benefit and any replacement legislation must do the same. Patients can't choose where and when they will need emergency care and they shouldn't be punished financially for having emergencies," the American College of Emergency Physicians said in a statement.

Wen said one ER visit could bankrupt someone without this protection.

"This is not about people paying a few dollars more a month," she said. "These are preventable deaths and I saw them every day in the ER."