Health Insurance Articles
How Existing Medical Conditions Affect Health Insurance Policies
2010-08-22
In the US, health insurance policies are a huge business. Similar to any other business, the goal is to make a profit for the company and its shareholders. In order to accomplish this objective, health insurance companies must take steps to reduce costs and limit the risks associated with offering insurance to the general public. This includes policies that deal with people that have pre-existing medical conditions by charging them higher premiums and out-of-pocket expenses, having a pre-determined waiting period before actual coverage begins, or in some cases, excluding them completely from receiving coverage.
In the eyes of the health insurance company, a pre-existing condition is any type of ailment that existed before the company offered coverage to the person. This can include anything from heart problems, allergies, old injuries, or even acne. Depending on the state, policy, and whether or not the individual purchases coverage through an employer or as an individual, even a relatively minor ailment can lead to a conditional acceptance and a waiting period that could last from 6-18 months (a maximum of 12 months if purchased through an employer) before full coverage begins.
This practice is known as a pre-existing condition exclusion. This means that the individual may not obtain coverage for any care, services, or incidentals related to the pre-existing ailment. These costs are solely the responsibility of the patient during the specified exclusion period.
For individuals that purchase health insurance policies through their employer, depending on whether or not the person has had coverage prior to the newer policy, they cannot be subject to the pre-existing exclusion policy. This can only occur if the individual has had less than 63 consecutive days without coverage. This is known as the "credible coverage" portion of the Health Insurance Portability and Accountability Act (HIPAA). This law, passed by Congress in 1996, provides some protection for individuals and their family members when they need to buy, change, or continue their health insurance.
Thus, pre-existing medical conditions can and do have a significant impact on the issuing and structuring of health insurance policies offered in the United States. This issue has such a large impact on health insurance policies, that legislation has been enacted to reduce and even eliminate the practice of denying coverage or raising premiums due to the existence of a pre-existing condition. Such legislation is slated to take effect in September of 2010, and benefits children under the age of 18 years old. Additional rules that govern the issuance of health insurance policies to people over the 18 with pre-existing conditions will take effect in 2014.
