For many years the insurance term “pre-existing conditions” has been a major scourge to countless men and women across the country seeking health care coverage. At last relief may be around the corner for these hapless individuals who have been unable to get affordable health insurance due to these so called “pre-existing conditions.” The newly-passed Affordable Care Act, also commonly known as “Obamacare” has a provision which will make it illegal for health insurance companies to continue denying, or rating up, individuals with these pre-existing conditions. Let’s take a look at some of the main points involved with this exciting development.
WHAT IS A PRE-EXISTING CONDITION?
The first thing to understand about this new legislation and the effect it will have on the American public, is to define what a pre-existing condition is. In its simplest terms, a pre-existing condition refers to a health condition that an individual had prior to applying for a health insurance policy. For example, if a person has childhood asthma and then upon reaching adulthood seeks health insurance coverage, he or she might be told by the health insurance company that the asthma is a pre-existing condition and therefore isn’t covered and/or may result in higher health insurance premiums.
IN WHAT WAYS ARE PRE-EXISTING CONDITIONS COMPLICATED?
However, while many pre-existing conditions are fairly straightforward as described above in the asthma example, many additional complications would often arise. For example in some instances a health insurance company may also deny our hypothetical asthma sufferer coverage on other respiratory conditions that he or she develops while already on the health insurance plan. This may seem like a direct violation of the notion of a pre-existing condition, but the health insurance company might have in turned argued that the individual only developed the subsequent respiratory condition due to his or her asthma and that therefore it is directly related to the already excluded pre-existing condition.
WHAT PROBLEMS DID PRE-EXISTING CONDITIONS CAUSE FOR PEOPLE SEEKING HEALTH INSURANCE?
Now that we have discussed what a pre-existing condition is and what sorts of things might be classified as a pre-existing condition, let’s take a look at some of the problems that pre-existing conditions might cause for those individuals unlucky enough to be saddled with them.
-Higher Costs – One of the most salient and obvious negative effects is the higher cost associated with health insurance premiums as a result of a pre-existing condition. Often people with these conditions were deemed by the insurance company to be inherently riskier to cover and therefore requiring higher premiums.
-Excluded Coverage – The other major problem for many Americans was that the illnesses, surgeries, and treatments that they most needed, were often the very same ones that were specifically excluded. Therefore they ended up having to pay out-of-pocket expenses for some of the most costly medical occurrences that happened to them.
-Negative Periphery Effects – Many people also found that thanks to a pre-existing condition relating to their health insurance, they might also be denied life insurance, or be subject to higher premiums. Additionally in some instances they may have faced subtle discrimination in the form of being turned down for other types of coverage or being otherwise excluded from certain things due to health status.
WHEN WILL THE NEW LAWS GO INTO EFFECT?
The new laws that will ban health insurance companies from continuing the practice of pre-existing conditions will go into effect starting in January of 2014. However, if you already have an individual health insurance policy you will need to get a new one in order to prevent the policy from being grandfathered in, and therefore having the exclusion on pre-existing conditions continue. People who have group health insurance coverage through their employers will not have to worry about this.
HOW CAN I GET A NEW POLICY?
A great option for finding a new policy is to use the Health Insurance Marketplace. Open enrollment into the Health Insurance Marketplace will begin October 1, 2013. The coverage itself will go into effect January 1, 2014. It is important not to miss the open enrollment period otherwise you won’t be able to enroll unless you have a “qualifying life event” as defined by the marketplace guidelines.
The bottom line is that the removal of pre-existing conditions from health insurance policies will give millions of American men and women additional coverage and lower premiums. This is one of many changes that is occurring as the result of Obamacare. For more information contact your insurance agent or refer to the Obamacare informational website.