Defining Terms — Pre-existing Condition
A pre-existing condition is any current health issue: 1) for which a person has received treatment in the past or 2) for which a prudent person would have sought treatment.
Pre-existing conditions may be anything as minor as a mild allergic reaction to dust or as serious as brain cancer or heart attack.
Pre-existing Conditions and Insurance Eligibility
Whether or not a condition is currently causing symptoms is not always an issue in underwriting for health insurance. There are some conditions that are assumed to carry much higher risk of requiring future care than others. For example, having a herniated disc is grounds for exclusion from purchase of an individual health insurance policy from one of the largest insurers in California. Regardless of how long the individual has been symptom-free, the underwriting guidelines assume that symptoms may recur at any time and require treatment. The potential cost of treatment is high enough that collecting enough premium over time to pay for it would exceed the allowable limits for premiums (currently set for this insurer at 100% more than the premium for a healthy person of the same age). This is what makes the condition “uninsurable” under standard individual policy guidelines.
Alternative sources of health insurance for persons with pre-existing conditions have included group plans (in states with guaranteed issue laws), HIPAA plans (for people who have been insured but whose current policy will no longer be available), COBRA plans (for those leaving group policies), or High Risk Major Medical Plans (sponsored by some states, including California). Most of these options will cost more and offer fewer benefits than a policy for a healthy individual with no pre-existing condition.
New Coverage Options for People with Pre-existing Conditions
The new federal law, the Patient Protection and Affordable Care Act (PPACA or ACA), has provided immediate relief for people with pre-existing conditions who have been uninsured for six months or more. Under the new law, such people are eligible to purchase health insurance plans through a state administered national high risk pool with no exclusions for care of their condition. Premium levels for these policies are set to protect the insured from having to pay exorbitant rates for insurance — a factor that will make it possible for more of the currently uninsured to afford insurance. When the law is fully implemented in 2014, health care exchanges will be established to cover persons with pre-existing conditions who are not insurable in the private sector.
The PPACA also made it illegal for insurers to deny coverage for pre-existing conditions to children under the age of 19. This provision is already in effect.
For more information on the new health care law, check out www.HealthCare.gov. It has good information about the law and links to insurance options for all the states.
This summary discussion of the term pre-existing condition is provided as a public service by Advanced Knowledge Resources, Inc. For more information or clarification, please contact us. For more specific insurance policy details, please visit Pozos Insurance Services.
