Final answer:
If a person fails to disclose a pre-existing condition, they risk being charged higher premiums or denied insurance coverage, a practice that was common before the ACA and led to a significant number of uninsured Americans and increased healthcare costs.
Step-by-step explanation:
When there is a failure to disclose a pre-existing condition, it can have serious consequences for individuals seeking insurance coverage. Prior to the Affordable Care Act (ACA), insurance companies could use undisclosed pre-existing conditions as a basis to charge higher premiums or deny coverage altogether. This practice contributed to the increase in the number of uninsured Americans, as individuals with high-risk health factors faced prohibitive costs or were excluded from the insurance market. As a result, those without insurance often resorted to using emergency room services for care, which is the most expensive form of healthcare and has significantly driven up healthcare costs. Additionally, adverse selection occurs when high-risk individuals purchase insurance while lower-risk individuals opt out, leading to increased prices for those insured.