What is a pre-existing condition and how does it work with insurance

After considerable debate and discussion, the Affordable Care Act, aka Obamacare, was passed/enacted on March 23, 2010. One of the key elements was the protection from exclusion or waiting periods by the insurance company for pre-existing conditions. To better understand this significant protection, it is important to look prior to 2010 to gain an understanding of what was in place and used by the insurance companies.

Definition: Most insurance companies use one of two definitions: “Objective standard” definition, a pre-existing condition is any condition for which the patient has already received medical advice or treatment prior to enrollment in a new medical insurance plan. Under the broader “prudent person’ definition, a pre-existing condition is anything for which symptoms were present and a prudent person would have sought treatment.

Before ACA/Obamacare: Which definition may be used was sometimes regulated by state law.

Ten states did not specify either definition, 21 required the “prudent person” standard and 18 required the “objective standard.” Every state, every insurance plan could make its own determination.

What did this really look like: Each state could determine their maximum pre-existing condition exclusion period. If a condition was deemed as “pre-existing,” the state’s pre-determined maximum waiting or exclusion periods before any coverage for the pre-existing condition was used. This period ranged from six months in Oregon, Massachusetts, and New Mexico to 10 years in Indiana, to unlimited in 10 other states. Idaho was part of a large group of states (23 states) with a maximum exclusion/waiting period of 12 months. Essentially, when purchasing insurance, if a pre-existing condition was identified/as requested when completing the health history upon enrollment, the insurance plan would apply a non-covered exclusion for up to 12 months for that diagnosis. (EX: The patient had cancer two years ago. Signs up for a new job, new insurance. The insurance could disallow any coverage for cancer care for up to 12 months.)

There was an additional “look-back period”/date ranges where the insurance could look for pre-existing conditions and deny or delay payment. Some were based on the size of the commercial insurance plan. (EX: 2-50 employees had more limitations than larger groups.)

In Part 2, we will compare the protections under the current law- Affordable Care Act/Obamacare with prior to implementation of the law.

We will outline the protections while updating the volume of Americans with pre-existing conditions which will now include the group of patients recovering from COVID-19.