Have Pre-existing Conditions Gone Away?

Have pre-existing conditions gone away?  There seems to be a lot on confusion about pre-existing conditions.  The passing of the health care reform bill, PPACA (Patient Protection and Affordable Care Act) has caused a little confusion.  Truth be told, there are so many topics to be covered, I am a bit overwhelmed with the information myself!

Here’s what I do know when it comes to the topic of pre-existing conditions.  They have gone away for some, they haven’t existed at all for others in a long time, and they still exist for many.

RECENTLY GONE

Pre-existing conditions have been eliminated for children under the age of 19.  That’s been the case for group plans, but now insurance carriers can’t decline coverage for children under the age of 19 when they apply for individual or family plans.  The insurance carriers must accept them.  That’s a real relief to one of my clients who recently applied for coverage for his teenage daughter who has type 1 diabetes.  Her father’s a school teacher and adding her to his plan as a dependent was costing him $700 a month more.  He’s in process of applying now because the carriers must have an open enrollment window between January and March to allow children to come on the plan.  After that, children can be added to the plans when they have a qualifying event, such as losing group coverage, birth etc.  So I’m very happy to help this guy and his daughter.  Makes me feel good when I know I’m helping after all.  There is a downside to all of this; the carriers can “rate up” for these conditions.

In the old market if you had a medical condition that a carrier would take on, the carrier could raise the rate say 25% or 50% because of that issue.  But, they could also outright decline coverage for you.  Now (again this is just for children) they have to accept everyone but they can charge more for medical conditions.  Let’s say I quote $200 per month for a plan, there’s a possibility the carrier could rate up as high as 100%, bringing the premium to $400.  For my client who is currently forking over $700 a month for his group plan would still saving money.  So that’s a good thing.  It would be really cool if I could save him save more money, but I’m happy to help in any way possible.

GONE A LONG TIME

The next group is the people whose pre-existing condition issue has been gone for some time.  In 1996, HIPAA was passed, which eliminated pre-existing conditions for group plans.  HMO plans had none whatsoever and for those enrolling in a PPO plan, as long as they had previous coverage there were no pre-existing conditions.  If you were new to coverage or hadn’t had coverage in more than 63 days, (who comes up with these numbers?) pre-existing conditions could be excluded from coverage for up to six months.  I never thought that was fair, but I wasn’t consulted when the law was written.

HOW LONG DO I HAVE TO WAIT?

Last is the group where pre-existing conditions still exist.  This is the part where I hear the question “But I thought that went away with health care reform”.  That will go away, but not until 2014!  And that’s assuming the law is not changed.  This applies to individual and family plans, not group insurance.

Individual plans are typically less expensive than group plans.  That’s because the insurance carriers accept only the people who are a good risk or like I said earlier may rate-up for some medical conditions.  The underwriting has become stricter and stricter over the years or maybe more and more of us are taking medications and have medical conditions that we didn’t have before.  I have a hard time getting people covered on individual/family plans because I typically “field underwrite”.

There’s also the major risk pool for those who have been uninsured for six months and declined coverage due to pre-existing conditions.  I wrote about that a few blogs back.  Just click the word blogs in blue for a refresher.

We are seeing some good changes for insurance as a result of PPACA.  There are other changes coming down the pike that will effect employers in the future.  Mostly administrative things which require us small employers to have more things to do.   I probably won’t be so kind when describing those to you.  But for now, the changes have been pretty positive.

Maybe we can focus on not going to the doctor at all!  But that’s another topic for another day.

P.S. I can’t believe I’m telling you all my secrets “field underwrite” “rate-up”, please help me keep my job a mystery by not repeating my secrets!