Health insurance can be difficult and expensive to obtain for people with pre-existing or chronic conditions.
Anyone with a pre-existing condition or chronic illness knows how difficult obtaining health insurance can be. These conditions, which tend to be long-term and require more frequent, more costly treatment, can make individual insurance prohibitively expensive. Even employees who are on an employer’s group health plan may have to wait a while, usually a year, before their treatment for these conditions are covered.
What is a Pre-Existing Condition?
A pre-existing condition is any illness or ailment that has been diagnosed, treated or recommended for treatment within the six months prior to a person applying for health coverage. This does not, however, necessarily apply to all chronic conditions. According to the Department of Labor, insurance companies can only look at an applicant’s health history for the last six months. So, if the person had a heart attack three years prior to applying for health insurance or switching group plans but has not been treated in the last six months, it is not considered a pre-existing condition.
Certain conditions, such as pregnancy, do not count as pre-existing, nor does a genetic predisposition toward a certain condition. A woman who finds out she has a gene for breast cancer, for example, cannot be denied coverage based on the pre-existing condition because she was not actually diagnosed.
HIPAA Protections
Generally, employer-sponsored plans will cover people with pre-existing conditions, just not immediately after they sign up.
The Health Insurance Portability and Accessibility Act (HIPAA) regulates how group health insurance plans can look at people with pre-existing conditions. People who have not had a significant lapse in insurance, meaning less than 63 days without coverage, can apply for creditable coverage, which can reduce the waiting period of 12 months.
Pre-Existing Conditions and Private Health Insurance
Individual insurance companies define a pre-existing condition, and most do require a waiting period when people switch group plans. However, companies do have options for high-risk individuals; they just tend to be costly. Until 2014, insurance companies are able to reject applicants for pre-existing conditions.
High-Risk Pools
States have turned to high-risk pools to fund insurance for people termed uninsurable by the private market. According to Med Health Insurance, individual states create these pools and fund the coverage, and each enrollee pays premiums to the state entity. This also is an expensive option but is usually more affordable than the private market.
In 2010, following the passage of the Affordable Care Act that affected the entire health care market, the federal government created a pre-existing condition plan that either states or the Department of Health and Human Services would administer. This option is for people who have been uninsured for at least six months and cannot get private coverage, according to HHS. It should be comparable in cost to the private market.
Changes in 2014
The Affordable Care Act, which will be fully in effect by 2014, bans insurance companies from rejecting adults with pre-existing conditions, according to HHS. It also is billed to create more access for small employers and individuals into the affordable health coverage market. At that time, high-risk pools and other programs will be unnecessary.
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