Pre-Existing Conditions and Health Insurance

One concern that many Americans have when applying for health insurance is whether they will be penalized for having a pre-existing condition. Unfortunately, many Americans do not have perfect health histories, and this can greatly affect the coverage they can receive. Health insurance companies are businesses, and an already at-risk patient can negatively affect their bottom line. This can make it very difficult for individuals with certain illnesses or issues to get adequate insurance without paying significantly more. Healthcare reforms have passed to make this less of a concern for individuals seeking insurance in the future, but the bulk of those reforms have not gone into law yet.

What Is It Exactly?

A pre-existing condition is a health condition that was known to exist before you applied for insurance coverage. They can be as serious as a life-threatening disease like cancer or heart disease, or they can be as common as allergies or asthma. The definition of exactly what a pre-existing condition is can vary by insurance company or by state, so it is important to check with your provider about their restrictions before signing up.

Why Does It Matter?

From an insurance company's point of view, a pre-existing condition can mean that the patient is more likely to seek out treatment, especially for that condition, than a healthy person would. That automatically means that the insurance company will have to pay more for that patient. From a business standpoint, it makes more sense to either offer insurance only to healthy individuals or to place restrictions on individuals with less-than-perfect health to ensure that they're worth the extra money.

How Can It Affect My Coverage?

Unfortunately, having a pre-existing condition can negatively affect your coverage for now. Depending on the company and your health issue, you may be denied coverage, have to undergo a waiting period before your coverage will start, pay higher premiums, or have a higher deductible. Your insurance company can also place restrictions on your care received for your condition, including not covering any healthcare concerning the health issue for a period of time (up to 18 months).

Healthcare Reform

For individuals with pre-existing conditions, the healthcare reforms signed into law in 2010 have a major impact on your ability to both get insurance and avoid the current pre-existing condition clauses. In 2014, laws go into effect that prohibit insurance companies from denying service and denying claims based on health issues that were already present. The law will also prohibit insurers from implementing special conditions like higher premiums and higher payments for individuals who have pre-existing conditions. Some aspects of these laws have already gone into effect for children who were under age 19 in 2010. Children can no longer be denied coverage on their parents' insurance based on pre-existing condition.