Facts About Shopping For Health Insurance With A Pre-existing Condition

Cart before the horse
Don’t allow others to cause you to put the cart before the horse and make assumptions that are not true.

The bulk of the information below was published last March, however, it is my belief that it is worth publishing again.

During the Health Care Reform debates of 2009-2010 emotions got the better over facts.

Politicians, press and people allowed themselves to believe that every visit to the doctor is a “pre-existing condition.”

The scare tactics that were used are costing people millions of dollars in health insurance premiums that are not necessary.  Many adults avoid shopping for the best deal they can get for health insurance because they are afraid that merely because they are taking a maintenance drug they cannot afford to do some comparison shopping.

In this post I want to answer some questions that should allay some fears.

Q.  What is a “Pre-existing Condition?”

Most insurance policies define a pre-existing condition as “anything that a reasonably prudent person would have sought medical attention for in the previous ___ months.”

The Centers for Medicare and Medicaid Services requires that all Medigap plans limit the look-back period to only 6 months.

For major medical policies, the look-back period can be as short as 12 months or as long as 24 months.  It will depend on the policy of the insurance company and your state Department of Insurance.   The pre-existing condition clause is one thing that you need to read and understand if you do obtain a new health insurance policy.

Q.  How are treatments for pre-existing conditions paid?

Contrary to what the insurance ignorant would have you believe, the purpose of pre-existing condition clauses is not to allow insurance companies to cancel your policy or decline coverage for you.  The pre-existing condition clause is to protect the insurance company and those who pay premiums from a phenomenon known as “adverse selection.”

Adverse selection happens when an individual goes without paying for insurance until he gets sick and then obtains health insurance through lies and deception.  When that happens too many times, those who pay for health insurance when they are healthy have to pay for the sick person’s medical bills through higher premiums.

Insurance companies are supposed to use the pre-existing condition clause to decline paying for health care for people who are trying to play games with the insurance company and it’s members by using deceit and lies.

Insurance companies will often waive the pre-existing condition clause if a medical condition is admitted by the applicant on the application (except for Short Term plans.)

As an insurance agent, I have been able to get insurance for people who are being treated for high blood pressure, high cholesterol and even diabetes.  In every case, the insurance company waived the pre-existing condition clause to pay for their treatment.

Q. What does a pre-existing condition mean to your health insurance premiums?

Even though insurance companies don’t always decline an application because of a pre-existing condition, they have the right to charge extra premium to applicants who have recently or are currently receiving medical treatment.  These “ratings” are added to the standard rates that are published for the public.

Currently, insurance companies use health underwriting for adult applicants.  That means that they calculate the premiums for a person in average health when they publish their rates.

If you are taking a prescription for something, you have greater odds of having medical expenses in the next year than someone who is not taking prescription medication.  The insurance company is likely to require you to pay a higher premium because of your higher risk.

Not every premium rating is the same.  I have seen premium ratings as low as 10% additional premium for the individual who is taking prescription medications and as high as 50%.  I have even seen insurance companies ignore their right to rate a policy and issue it with the standard premium.

The only way to know what or whether there will be a rating at all, is to submit your application to the insurance company and let them take a look.

Q. Are there government protections for pre-existing conditions already in place?

The answer to this question is a qualified yes.  Current law does not guaranteed coverage for a pre-existing condition.  What it says is that if you had “Creditable Coverage” before you changed insurance companies and you were honest on your application, your new individual health insurance company will waive the pre-exisiting condition clause.

This provision is a part of the HIPAA laws from the Clinton administration.  However, like every thing that comes out of D.C., you need to be aware of the limitations before you claim your rights.

  1. This law was designed to protect people who lose their health insurance when they change jobs.  It applies to people moving from a group plan to another group or individual plan.  Some, but not all, insurance companies have extended these rights to people who switch from an individual plan to a group or different individual plan.
  2. This law is incremental.  If you qualify for the benefit, your new insurance company is required to reduce your pre-existing condition by 1 month for every month you had “Creditable” health insurance in the past 18 months.
  3. This law has a time limit.  It requires that you have not gone without health insurance for longer than 63 days.
  4. This law requires verification.  If your prior health insurance was “Creditable,”  when your coverage stops, they will send you a “Certificate of Creditable Coverage.”  You will need to give your new insurance company a copy of that certificate before they will waive the pre-existing condition clause.

Q.  Does Obamacare help those with pre-existing conditions.

Obamacare does have some benefits that are extendable to Americans with pre-existing conditions.

  1. Guaranteed coverage for juveniles was mandated by the PPACA as of March 23, 2010.  If a child, under the age of 18 applied for health insurance after that date, coverage was guaranteed, regardless of any health risks.
  2. For the next year, those who have pre-existing conditions still must be able to pass their insurance company’s medical underwriting qualifications before they can get health insurance.  In January of 2014 medical underwriting for government approved, “Essential Benefit” plans, will be eliminated.  Just do not allow yourself to be deceived.  Insurance companies will still be allowed to use medical underwriting for all other health insurance plans they offer.


If you do shop for health insurance, here are a few tips to make your shopping as painless and less confusing as possible.

  1. All insurance policies are not the same.  Make certain that any new policy you are looking at covers everything that you want it to.
  2. If you are not comfortable on the inter-net, find an insurance agent that you can trust to help you build your insurance portfolio.
  3. Major Medical plans are the most comprehensive and expensive part of your health insurance portfolio but they generally leave some things uncovered.  You will need to supplement the Major Medical plan if you are wanting to protect yourself from all expenses.
  4. By requesting that your policy go into effect 30-45 days in the future, you give the insurance company time to do what they need to do and get your policy and ID card to you before your coverage starts.
  5. Never cancel your current plan until after you have gotten your new plan materials in your hand.  (Your local insurance agent is not able to cancel your existing plan for you.  You will need to do that yourself.)

If you do not already have an insurance agent whom you trust, The Insurance Barn would like to apply for the job.  Use the contact form on the right to start communications with us.


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