Preexisting conditions have long been a touchy subject in the health insurance world, and will continue to be a flashpoint as the ACA debate keeps playing out in every election. But what are they and how do they affect your coverage? We discuss what this means in today’s article.
Defining Preexisting Conditions
Simply defined as a “condition that existed before one applies for health insurance,” they often refer to things that may result in higher lifetime benefits paid out by insurers.
According to the Kaiser Family Foundation, common examples of pre-existing conditions that affected coverage before the ACA are:
- Cerebral palsy
- Depression and other mental health disorders
- Dementia (Alzheimer’s)
- Gender dysphoria
- Heart disease, coronary artery, bypass surgery
- Hepatitis C
- Pending surgery or hospitalization
- Sleep apnea
Much like preventing someone from buying home insurance after the house burned down, these were initially used by insurers to limit the risk of health plans and keep costs low.
However, leading up to the passage of the ACA, preexisting conditions had expanded to deny coverage or increase costs for a variety of reasons ranging from acne to tonsillitis. In fact, a Kaiser Family Foundation analysis found that almost 30% of U.S. adults younger than 65 have health conditions that would have left them uninsurable in a pre-ACA world.
In turn, the ACA required that for a plan to be compliant, it can’t deny coverage based on preexisting conditions.
Can You Be Denied Coverage?
The answer to this question, put simply, is unlikely. If you are to choose an ACA compliant health insurance plan on the health insurance marketplace, the answer is no. However, there are certain situations in which you may be denied or required to pay more.
ACA Compliant Health Insurance Plan: No Denial
Possibly the main provision of the many thousands of pages in the ACA is the inability to be denied for a preexisting condition. However, this is just one part of a larger plan. Here are just some of the components of an ACA compliant plan.
10 Essential Health Benefits
During the creation and passage of the Affordable Care Act, policymakers determined ten “essential health benefits,” designed to make sure individual and small group health insurance plans offered a quorum of services to be considered federally recognized. We discussed this more in our article titled What Are the Federal/Marketplace Essential Health Benefits?
No Denial Based on Preexisting Conditions
To be compliant with the ACA (and in turn available on the Healthcare.gov marketplace), insurance companies cannot deny you coverage or charge you more because of a preexisting condition.
Specific Timeline to Apply
Another thing to know about getting coverage on the marketplace is that you may have a limited timeframe to apply for coverage. Generally, this is limited to an open enrollment period in November, but special enrollment periods (SEPs) do exist that allow you to obtain coverage in the result of job loss, divorce, or the like.
Short-Term Coverage Can Deny You based on Preexisting Conditions
For some people—especially those looking at a short-term health insurance plan—the answer is a bit more nuanced.
As we discussed in our article on the short-term health insurance basics, short-term health insurance plans are built on different timeframes, often provide lower premiums, and can provide greater flexibility for people who are interested. Recently, these plans regained momentum as a result of the Tax Cuts and Jobs Act, which removed the healthcare tax penalty.
Prior to the TCJA mandate, this penalty was levied upon any individual who didn’t have an ACA compliant plan discussed above. As these were not designed to fall under the ACA-compliant umbrella, insurers do have the right to determine whether or not you are eligible for coverage based on preexisting conditions.
Often tailored to healthy individuals least likely to use the covered services, you may run into higher deductibles and out of pocket costs throughout the life of the plan, and you can be denied coverage if you do have a preexisting condition. With open enrollment right around the corner, those without a preexisting condition may be able to cover the next few months.
Ready to see if this plan might be right for you? Request a quote to compare prices.
Additional Coverage (Supplemental and Gap Coverage) May Be Limited
Preexisting conditions may also limit your options or exclude you from obtaining life insurance or gap coverage. Gap coverage, designed to cover the gaps in an insurance plan includes supplemental insurance, is increasingly popular as a result of high deductible health plans. From Accidental Death and Dismemberment, Cancer Insurance, Hospital Indemnity, and more, these plans may help you protect yourself from high costs. Learn more about these plans here.
Grandfathered Plans (Extremely Rare)
Additionally, the grandfathered plans provision allowed plans in effect on or before March 23, 2010 to be exempt from some reform provisions. Grandfathered plans include self-funded, employer-sponsored plans, and insured group and individual health plans in effect on this date. According to United HealthCare, grandfathered plans are exempt from some provisions in the Act, but not all.
UHC adds, exemptions include appeals, preventive care at no cost share, certain patient protections, Essential Health Benefit requirements, rate restrictions/adjusted community rating, guaranteed issue and renewability, and out-of-pocket requirements.
Your Options with a Preexisting Condition
Often, if you have a significant preexisting condition and are not able to receive employer coverage, the most likely way to obtain insurance is through the Health Insurance Marketplace. But understandably, you still have options and still have questions. That’s where Insurance Broker Hub comes in.
Our free service gives you access to an independent network of national brokers who have the experience and expertise to design a plan around your needs and budget. Ready to get started? Simply request a no obligation health insurance quote here.