This article, reproduced here with kind permission,* was first published July 23, 2012, on TermLifeInsurance.org, a consumer-oriented site dedicated to providing helpful insurance information, news & perspectives. The author, Rachel Estill, is the site’s senior editor.
As Rachel notes, 129 million Americans under age 65 currently have proclaimed pre-existing health conditions. She covers their challenges, current and planned protections in 2014, bridging options & potentially useful loopholes.
Understanding Pre-Existing Conditions
By Rachel Estill
A pre-existing health condition is an illness, physical condition, mental condition, or disability that you have prior to obtaining a health insurance plan. Insurance companies tend to be prejudiced against those with pre-existing conditions because it can mean insuring people who will cost them significantly more than healthy individuals.
Given its broad definition, insurance agencies each have a different idea of what constitutes a pre-existing condition, which means that they can either deny you coverage or charge you a higher premium based on your perceived risk.(1)
They can also accept your application, but deny you coverage for specific things thought to be associated with your condition. This could work highly against you.
While some insurance companies only consider the extremes - such as cancer or heart conditions - to be pre-existing conditions, others consider things as small as acne and bouts of depression that you’ve since recovered from to be legitimate causes for increased premiums.
For some, their pre-existing condition means not being able to afford their premiums or being denied insurance altogether, so they go uninsured - often in spite of an illness that can potentially cost them expensive medical bills.
According to the Kaiser Family Foundation, 21% of health insurance applicants with pre-existing conditions either get turned down, charged increased premiums, or receive coverage exclusions pertaining to their ailment.
Obtaining group coverage through the company you work for can alleviate the problem, as they are unable to turn people away based on pre-existing conditions, but a large chunk of people do not have access to insurance through work. They might work somewhere without benefits, be self-employed, or be too sick to work. For those, the desperate need for affordable health care is a growing problem.
The more pre-existing conditions you have, the higher your premiums are likely to be, or the less likely you are to find coverage.
There are hundreds of conditions that your insurance provider may consider among the list, but some common conditions might include cancer, diabetes, high blood pressure, ADHD, depression, arthritis, or asthma. [As well as chronic fatigue syndrome (ME/CFS), fibromyalgia, multiple chemical sensitivities, and Lyme disease.]
The Affordable Care Act
If you’re feeling discriminated against for having a condition that you can’t control, there may be hope yet.
The Affordable Care Act, which will be in full effect by 2014:
• Makes it impossible for insurance companies to deny coverage or raise premiums for those with pre-existing conditions.
• It will also lift insurance companies’ ability to cut coverage for those who have made mistakes on their application,
• And allows for those under the age of 26 to stay on their parent’s insurance plan if they are unable to gain access to insurance benefits through work.
It is already available to children, but not adults.
While it is in the works now, some members of Congress are working to repeal it, an idea that leaves much of the 129 million Americans under age 65 with proclaimed pre-existing health conditions fearing the worst.
According to the Department of Health and Human Services, that number equates to roughly one in every two Americans, who could be without affordable health insurance coverage.
Until the Affordable Care Act is activated, the Pre-Existing Condition Insurance Plan(2) can provide health insurance to tide over those with pre-existing conditions who have been denied it or could not afford coverage for the past six months or longer.
The coverage is the same cost as it is for those without pre-existing conditions, and provides coverage associated with your specific condition. Although it is available in every state, each state has its own stipulations for eligibility.
In some cases, the Pre-Existing Condition Insurance Plan isn’t the best option. For example, Medicaid may be better suited for you.
Health Insurance Portability and Accountability Act
The Health Insurance Portability and Accountability Act, which took effect in 1996, is the federal law that made company-enacted health insurance policies more accessible to those with pre-existing conditions, so long as you work for an employer that offers an insurance plan.
The law ensures that there are limits to which an employer may exclude certain types of coverage. It also makes sure:
• That certain people may be able to renew their policy each year,
• That group health plan opportunities exist for those that have lost coverage,
• And that no employees or dependent family members will be discriminated against based on current or prior medical conditions, claims, or genetic profiles.
HIPAA is flanked by state laws that further round out the state of health care accessibility for employees.
One of the major goals of HIPAA is to control the amount of time insurance companies look back at past conditions.
You may have suffered depression years prior to obtaining health insurance, for example, and even though you’ve recovered, the insurance company claims it to be a pre-existing condition. Under HIPAA:
• The insurance company may only reflect illnesses, disabilities, or conditions included within six months of obtaining your insurance coverage.
• Additionally, they may only make exclusions on those conditions if you received or were recommended medical advice, diagnosis, care, or treatment.
• HIPAA also makes it impossible for plans to have coverage exclusions on pregnancy.
• HIPAA puts a precursor on how long you can have coverage exclusion for a pre-existing condition, limiting it to 12 months or 18 months for late enrollees.
Still, HIPAA will only take one so far:
• It doesn’t force an employer to carry health coverage and it doesn’t ensure that your current or past conditions will be covered by your employer’s policy.
• Likewise, if you’ve been treated within the past six months, your employer has the right to enforce a preexisting condition exclusion period.
While HIPAA helps employees with pre-existing conditions tremendously, it doesn’t help those who do not have insurance through a group insurance plan.
Loopholes for Getting Insurance
According to Kevin Lembo, a state health care advocate with the state of Connecticut, there are ways to get around the lack of affordable insurance for those with pre-existing conditions.
• First off, in around 12 different states, you have the option of having group coverage in a group that entails only yourself. Essentially, you’d be a group of one.
• Likewise, in states where you can’t become a group of one, you may be able to wrangle in one other person and become a group of two.
In both cases, the insurance company can’t deny you coverage or raise premiums because it is considered group coverage in the same way you would be granted coverage while working within a company.
If both scenarios fail and you lose your job, Lembo recommends getting COBRA.
While it is expensive, it may be a last resort for those who can’t get insurance any other way. Under COBRA, if you lose your employer-related insurance, you can apply for insurance within 63 days and “the insurer of last resort” has to accept you.
However, in some states, these insurance companies can charge outrageous premiums, with no limit. Thus, for someone who simply can’t afford insurance, it isn’t a feasible option.
Alternatively, your state may have a high-risk pool.
These are made specifically for those with pre-existing conditions who can’t obtain affordable insurance without help.The high-risk pool will provide necessary insurance.
Lastly, if you belong to a professional organization such as an arts collective, it may offer insurance.
Woes of Being a Woman
To put it simply, being a woman was once seen as a pre-existing condition.
Once the new health care laws stipulated that there could be no more gender discrimination within insurance policies, that all changed. [Unlike some other changes outlined in the Affordable Care Act which will not take effect until 2014, the law’s over-arching ban on sex discrimination took effect immediately.]
Before healthcare reform, insurance companies took full advantage of the absence of a law that would ensure that women did not pay more for coverage.
According to the New York Times (in March 2010), insurance companies used to engage in “gender rating,” in which companies selling individual health policies would inflate the price of insurance for women over the price given to men. This happened even if the women was applying for a policy that didn’t include maternity benefits, and was backed by the unfounded belief that women cost more to insure than men because they allegedly use the health care system more frequently.
A 2008 analysis by the National Women's Law Center noted that women’s premiums could range anywhere from 4% to 48% higher than men’s.
• In fact, a non-smoking woman could pay more for her policy than a man who smoked.
• If you wanted maternity coverage, the policy would cost significantly more, with some even excluding it entirely. With the new laws, that is no longer the case, and maternity benefits are included in virtually all policies with a higher premium.
• The old laws even allowed insurance companies to deny coverage for women who had undergone Caesarean sections or been victims of domestic violence. Insurance companies withheld coverage for such “conditions” because they saw them as red flags, nodding to women who would need future related medical attention.
Senator for Maryland Barbara A. Mikulski, an advocate for women’s health, expressed her relief that women are no longer the subject of prejudice through their health coverage. In a 2010 press statement, she mused on the new health care laws:
“One of my hearings revealed that a woman was denied coverage because she had a baby with a medically mandated C-section. When she tried to get insurance coverage with another company, she was told she had to be sterilized in order to get health insurance. That will never, ever happen again because of what we did here with health care reform.”
1. “45 Articles About Life Insurance Policies for High Risk Groups.”
2. “New Pre-Existing Condition Insurance Plan Begins,” by HealthCentral ME/CFS & Fibromyalgia Health Guide Karen Lee Richards.
* Note: This article is reproduced here with kind permission of TermLifeInsurance.org. ©2009-2012 TermLifeInsurance.org. All Rights Reserved. It is general information on a topic of interest to those with pre-existing conditions, is based on the research and perspective of the author unless otherwise noted, should not be interpreted in any way as a substitute for the personal advice of a professional, and is not intended to represent the views of ProHealth Inc. or its staff.