Pre-existing condition

In medical insurance terminology, a pre-existing condition is a long-term or chronic health problem that a person had prior to the activation date of a new policy. Common examples include illnesses and conditions such as asthma, diabetes, kidney disease, cancer, HIV/AIDS, and Alzheimer’s disease. Many private insurance companies also consider serious one-time events like heart attacks and strokes to be pre-existing conditions, since they often have adverse health effects that can last long into the future and thus present the insurer with a heightened degree of risk.

Pre-existing conditions are a contentious topic in the American health-care system, which is largely administered under a privatized structure rather than through taxpayer-funded government agencies. In countries where health insurance is provided by governments to citizens at no out-of-pocket cost, pre-existing conditions are usually a non-issue since all eligible recipients are covered from birth. One exception in such cases applies to out-of-country travel, which may force travelers to purchase private supplementary insurance for the destination country or countries that may limit or exclude coverage for pre-existing conditions.

Background

The cost of any form of insurance coverage depends on what industry professionals call a risk assessment. Calculation methodologies vary, but all risk assessments involve evaluating a prospective customer’s profile to determine his or her likelihood of filing a claim that the insurance company would be legally obligated to cover. The greater the risk a customer poses, the higher the cost of the insurance policy. These costs are reflected in annualized or monthly payments known as premiums. During the application process, customers are obligated to disclose all factors that could affect their risk assessment. For health insurance policies, this means that would-be coverage recipients must tell the insurance company about any and all known health conditions they have that may require monitoring or treatment in the future. These ailments are known as pre-existing conditions.

Prior to 2010, health insurance companies retained the right to limit benefits or deny coverage to applicants with pre-existing conditions, or to refuse to pay the costs associated with managing or treating such conditions. Some companies specialized in providing insurance to consumers with pre-existing conditions who were denied coverage elsewhere, albeit at significantly increased premiums. In another scenario, health insurance policies would sometimes be formulated to exclude the pre-existing condition from the coverage terms.

As a result, millions of Americans with pre-existing conditions were unable to find or afford health insurance to meet their coverage needs. President Barack Obama (1961–) pledged health-care reform as part of his 2008 election campaign, and succeeded in passing the Patient Protection and Affordable Care Act in 2010. Also known as the Affordable Care Act (ACA) and Obamacare, the policy made it illegal for insurance companies to deny coverage to applicants with pre-existing conditions. It also prohibited insurers from limiting the coverage benefits available to people with pre-existing conditions, and from refusing to cover the costs of an insured individual’s treatments for pre-existing conditions. Prior to the implementation of the ACA, an estimated fifty million Americans, including seventeen million children, had pre-existing conditions that affected their ability to obtain health insurance. Approximately 47 percent of insurance applicants with pre-existing conditions were denied coverage when applying to private insurers.

Topic Today

Insurers vary in their interpretation of the term, but in general, pre-existing conditions can include any medical test, preventive treatment, or previous diagnosis that indicates the presence of an illness or condition with the potential to impact an individual’s future health status. The most common examples of pre-existing conditions include diabetes, drug or alcohol abuse or dependence, cancer, heart attack and stroke, kidney failure, rheumatoid arthritis, Alzheimer’s disease, inflammatory bowel syndrome and Crohn’s disease, fatty liver disease, and HIV/AIDS. Insurance applicants with pacemakers can also be considered as having a pre-existing condition, as can otherwise healthy individuals who have an intellectual disability, are obese, or have undergone counseling for an addiction or mental illness. Controversially, pregnancy is also considered a pre-existing condition by many American insurers. Prior to the passage of the ACA, women typically faced a one-year delay from the activation date of their health insurance policy before pregnancy would be covered.

Once the ACA was signed into law, the American federal government introduced a temporary program to allow people with pre-existing conditions to obtain coverage. Known as the Pre-Existing Condition Insurance Plan (PCIP), the initiative offered coverage options to people with pre-existing conditions who had gone without health insurance for at least six months and had been refused coverage on the basis of their pre-existing condition by a private insurer. The PCIP was phased out on April 30, 2014, when the full implementation of the ACA made it illegal for private insurers to deny coverage or claims for consumers with pre-existing conditions.

However, pre-existing conditions continued to affect private health-care coverage in the United States. A grandfather clause exempted active health insurance plans purchased prior to March 24, 2010, from the ACA mandate against denial of coverage or benefits to people with pre-existing conditions. Many insurance companies responded to the ACA by simply increasing premiums for all customers, regardless of the presence or absence of a pre-existing condition. Others sought loopholes or technicalities that would allow them to deny or limit coverage benefits payable to policyholders with known health conditions. For example, some insurers excluded high-cost medications required by people with certain pre-existing conditions from their plans, effectively forcing them to seek coverage elsewhere by making the policy’s terms unaffordable.

Under President Donald Trump (1946–), pre-existing conditions reemerged as a topic of political debate. The Trump administration mounted legal challenges against the ACA, seeking to leverage technicalities to nullify part or all of the legislation. Though Trump consistently stated he had no intention of removing protections for people with pre-existing conditions, he instructed his administration to ask a federal court to rule the ban on pre-existing conditions unconstitutional. However, the ACA remained in place by the end of the Trump administration, and under President Joe Biden (1942–) support for the ACA was further bolstered. Subsidies for the ACA were extended by two years upon the introduction of the American Rescue Plan Act of 2021, which provided funding to support a number of key areas affected by the COVID-19 pandemic that began in 2020. Support for the ACA continued when the Biden administration announced the Inflation Reduction Act of 2022, which provided three more years of subsidies for the ACA, and that same year the Biden administration implemented a rule that increased the number of eligible families for subsidized health plans.

Bibliography

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