Health Insurance for People with Pre-existing Conditions
By law, most health insurance plans have to cover people with pre-existing conditions. But which plans are the best? Which ones are the worst? And which ones don’t have to cover those conditions? You’ll find answers to all these questions and more here.
Good news: most health insurance plans now cover pre-existing conditions. That includes coverage you get from an employer, the government-run “marketplace,” direct from insurance companies, Medicare, or Medicaid.
After all, the Affordable Care Act has required it for years.
Still, if you’re not one of the tens of millions of Americans who have a pre-existing condition, knowing that “most” US health plans cover it isn’t much help. It leaves a lot of questions hanging in the air. Among them:
- What are pre-existing conditions? Or which medical problems or issues do health insurance companies consider to be pre-existing conditions?
- Which health insurance plans or plan types cover pre-existing conditions?
- Which health plans don’t (or don’t have to) cover them?
- Why do some plans cover pre-existing conditions and some don’t?
- Do health insurance plans have to cover pre-existing conditions?
- Has that always been true? And will it always be true in the future?
- What are the best health plans if you have a pre-existing condition? What are the worst health plans if you have a pre-existing condition?
Keep reading for answers to all those queries and more.
What are Pre-existing Conditions?
Before we dig into how health insurance plans cover pre-existing conditions, let’s talk basics.
What medical problems and issues do insurance companies count as pre-existing condition?
Cigna says a pre-existing condition is any “medical illness or injury that you have before you start a new health care plan.” Also, it’s “typically [a condition] for which you have received treatment or diagnosis.”
Thankfully, Cigna doesn’t stop with those broad definitions. It offers up these examples of pre-existing conditions along with them:
- Chronic obstructive pulmonary disease (COPD)
- Sleep apnea
That’s not even close to an exhaustive list. Here are a few more conditions insurers often treat as “pre-existing”:
- Alzheimer’s disease
- Cardiovascular disease
- HIV and AIDS
- Inflammatory bowel disease
- Kidney failure
- Rheumatoid arthritis
Add in things like asthma, anxiety, and even acne and it’s be clear that health insurance companies consider a wide range of issues to be pre-existing conditions.
Granted, you don’t need to worry much about that now. Bottom line: most health plans cover pre-existing conditions thanks to Obamacare. Which ones are we talking about here? You’ll find out in the next section.
Which Health Plans Cover Pre-existing Conditions?
Since 2014, the Affordable Care Act requires nearly all health insurance policies to cover pre-existing conditions.
Here’s what that means for the most common types of US health plans.
Job-based or employer-sponsored coverage and pre-existing conditions
Of all the plan types discussed in this article, employer-sponsored or job-based ones changed the least in Obamacare’s wake. Or at least they changed the least as far as coverage of pre-existing conditions is concerned.
Even before that law’s passage, these plans couldn’t refuse to cover an employee’s pre-existing conditions. They could, however, delay covering those conditions. In fact, they could delay covering pre-existing conditions for up to a year after someone starts a new job.
That’s no longer the case thanks to the ACA. The law doesn’t allow such “waiting periods.”
On a related note, the Affordable Care Act improved job-based coverage in other important ways, too. It required plans to cap how much a policyholder could pay out of pocket for healthcare in a year.
It also made them stop attaching annual or lifetime dollar limits to plan benefits. That’s a big deal, because those limits left a lot of Americans with hefty medical bills. Previously, reaching your policy’s cap meant you had to pay those bills out of your own pocket. Or you had to find other coverage that would pay for them.
Marketplace and off-marketplace coverage and pre-existing conditions
The Affordable Care Act created the health insurance marketplace. So, it stands to reason that any plans you buy there cover pre-existing conditions.
But what does mean? When it comes to marketplace health insurance policies, “covering pre-existing conditions” means they can’t:
- Reject you if you have a pre-existing condition
- Refuse to cover a pre-existing condition after you enroll in a policy
- Charge you more or raise your rates because you have a pre-existing condition
The one exception to this rule: grandfathered health insurance plans.
Grandfathered plans are those you bought before the Affordable Care Act became law on March 23, 2010. Because of that, they don’t have to cover pre-existing conditions. (They also don’t have to cover preventive care. For more on what that means, read our article about health insurance and preventive care.)
If you have a grandfathered health plan and you want coverage for pre-existing conditions, switch policies. A marketplace plan is your best bet, as they all provide this kind of coverage. That’s not your only option, though. You could buy a plan away from the marketplace, directly from an insurance company. Most of those “off-marketplace” plans must cover pre-existing conditions, too.
Two things to keep in mind if you decide to switch from a grandfathered plan to a marketplace or off-marketplace plan:
- You’ll most likely have to wait until the next open enrollment period begins to make this change.
- The only time you can change plans outside of open enrollment is after your grandfathered plan year ends. (That qualifies you for a special enrollment period.)
Medicare and pre-existing conditions
Original Medicare, also known as Medicare Part A and Part B, covers pre-existing conditions.
Medicare sometimes does one better than that. How so? Americans with certain medical problems can qualify for Original Medicare before they turn 65. Age 65 is when most people start receiving its benefits
As an example, if you receive disability benefits from the Railroad Retirement Board or the Social Security Administration for 24 months in a row, you’ll start receiving Medicare Part A and B benefits.
If you’re diagnosed with ALS or end-stage renal disease, you should get Original Medicare coverage even faster. For instance, coverage starts the first month you receive disability benefits for ALS.
Although Original Medicare covers pre-existing conditions, the same isn’t always true of Medicare Advantage and Medicare Supplement policies.
Americans with ESRD may have a hard time finding a Medicare Advantage plan, though. And they may have to wait until they turn 65 to buy a Medicare Supplement plan (also known as MedSup or Medigap). Under federal law, insurers don’t have to sell Medigap policies to people under the age of 65.
Also, people with any kind of pre-existing condition may have a hard time finding MedSup coverage. Insurers can’t refuse to sell these plans to those who buy one during their six-month open enrollment period. They can do so outside that enrollment period, though. Or they can charge higher rates or make you wait six months for coverage.
Want to learn more about the many forms of Medicare coverage discussed here? Check out our Medicare guide or our Medicare Advantage guide. Also, see our MedSup FAQ and our article, “When Does it Make Sense to Get a Medicare Supplement Plan?”
Medicaid and pre-existing conditions
Like Medicare, Medicaid should do a pretty good job of covering any pre-existing conditions you have.
Don’t always assume that’s the case, though. Medicare and Medicaid operate differently, which means they don’t cover all situations in the same ways. That’s partially due to how they’re run. The federal government manages Medicare on its own. But states have individual leeway to operate Medicaid. How one state deals with a health issue may not be the same as how your state deals with it.
Nowhere is this more obvious than issues that requires special treatment, like physical therapy or respiratory care services. Those and many other forms of treatment are optional benefits under Medicaid. That means states can choose to provide them or not.
If you think you qualify for Medicaid but you’re unsure if it’ll cover your pre-existing condition, contact your local agency it.
Which Health Plans Don’t Cover Pre-existing Conditions?
There are two types of health insurance plans to avoid if you have a pre-existing condition
Some of these don’t cover pre-existing conditions because insurers sold them before the Affordable Care Act. Remember, the ACA is what requires insurers to cover pre-existing conditions.
The good news is you can’t buy grandfathered plans today. In fact, the only way you could have one now is if you enrolled in 2010 or earlier.
If that’s the case for you, switch to an Obamacare marketplace policy. Or change to an off-marketplace policy – one you buy directly from an insurance company.
Short-term health plans
Until recently, short-term health insurance didn’t get much attention in the US. There are a few reasons for that. The main one is that this type of coverage doesn’t last longer than three months. After that, you had to renew it.
These temporary health insurance policies existed to bridge short gaps in coverage. Such as when people are between jobs. Or when they lose their insurance for some other reason. They weren’t meant to replace more traditional policies.
Today, short-term health policies can last up to three years. Don’t confuse them for full-fledged coverage, though. They still can refuse to cover Americans with pre-existing conditions. Or they can charge them more than they would charge people who don’t have medical problems.
So, if you have a pre-existing condition, you should think carefully before you buy a short-term health insurance plan. Yes, these plans often cost less than ACA marketplace plans, but they offer less coverage, too.
For more information on the pros and cons of these policies, read our article on short-term health insurance.
Why Do Some Health Insurance Plans Cover Pre-existing Conditions and Some Don’t?
The short and sweet answer: the Affordable Care Act.
Health plans that have to follow the ACA need to cover pre-existing conditions. Health plans that can ignore that law don’t have to cover pre-existing conditions.
Thankfully, most health insurance plans have to abide by the ACA. That includes policies you get from:
- An employer
- The Obamacare marketplace (or your state’s exchange)
And it includes most of the policies you get directly from insurance companies, too. In other words, most plans must follow the ACA, meaning most plans cover pre-existing conditions.
If you have a pre-existing condition and you’re worried a health plan won’t cover it, contact the insurer. Explain your situation to them and then ask how that plan will treat your medical issue or problem.
Best Health Insurance Plans for People with Pre-existing Conditions
Employer-sponsored coverage is the best bet for people with pre-existing conditions.
Don’t have access to that kind of coverage? Consider buying a plan through the health insurance marketplace set up by the Affordable Care Act. All marketplace or exchange plans have to cover pre-existing conditions. That should make shopping for one a lot easier. Instead of worrying if a plan covers your condition or not, you can focus on premiums, deductibles, and other out-of-pocket costs.
Struggling to make ends meet? Look into Medicaid. If you qualify for it, it should cover whatever pre-existing condition you might have.
Medicare is the main option for anyone 65 or older, of course. It’s also a great option for younger people with qualifying disabilities or health issues.
But which type of Medicare should you choose in those circumstances? Medicare Advantage and MedSup plans can bolster your coverage or help you pay for care. But they’re not always available to people with pre-existing conditions. At least Original Medicare can’t turn you down if you meet its requirements.
What Are the Worst Health Insurance Plans for People with Pre-existing Conditions?
If you have a pre-existing condition, you’ll want to avoid short-term health insurance. Yes, it can help in a pinch. Yes, it can be cheap. But it also can be hard to find a short-term plan that covers pre-existing medical issues and problems. And even if you can find one that fits that bill, you’ll likely pay for it in the long run.
Other Frequently Asked Questions
Q: Do US health insurance companies and plans have to cover pre-existing conditions?
A: If they have to follow the Affordable Care Act, they also have to cover pre-existing conditions.
The good news: most health insurance policies must follow the ACA’s rules and regulations.
Grandfathered or short-term plans are two of the only types of health plans that don’t have to abide by the ACA.
Q: Have US health plans always had to cover pre-existing conditions? And will they have to cover them in the future?
A: Regarding that first question: no, they haven’t. Before the Affordable Care Act, job-based health insurance usually covered pre-existing conditions. But the same wasn’t true of coverage other plan types.
More often than not, if you bought a health plan directly from an insurance company, it didn’t cover pre-existing conditions. Or if it did, you paid quite a bit more for it.
As for how US health insurance will cover pre-existing conditions, it’s hard to say. If the ACA is repealed, there’s a good chance insurers won’t have to cover pre-existing conditions.
Q: Why is it important for US health plans to cover pre-existing conditions?
A: Gerald Kominski, a senior fellow at the UCLA Center for Health Policy Research, told the Los Angeles Times last month that “health insurance markets work best when the risk pool is broad.”
The reason for that, according to the article’s author: “the entire system is [based] on the idea of spreading potential danger as widely as possible--that is, among the greatest number of policyholder--to provide the best possible coverage at the lowest possible price. The more people in the risk pool, the lower everyone’s costs.”
“Anything that expands the risk pool is welcome,” added David Dranove, a professor of health industry management at Northwestern University's Kellogg School of Management.
Also, “segmenting the market by health status provides a benefit while you’re healthy,” Kominski said, “then penalizes you when you get sick and need insurance the most.”
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