Pre-Existing Health






Conditions

When the term "pre-existing condition" is mentioned during a discussion of health insurance, it can send chills up the spine. For many, a pre-existing condition can be the biggest stumbling block to finding any health insurance, even a plan that is prohibitively expensive.

Before the adoption of the Health Insurance Portability and Accountability Act of 1996 (HIPAA), signed into law by then U.S. President Bill Clinton, a pre-existing health condition could have a disastrous impact on an individual's finances and their ability to get treatment for the problem. These problems still exist for those seeking individual health insurance, but HIPAA regulations now prohibit group insurance plans from denying coverage to applicants because of pre-existing conditions, but there are a number of strings attached.

Look Back Period

Under the provisions of HIPAA, group health plans only can exclude coverage for a pre-existing condition if an applicant received medical advice or treatment for this condition during the six months immediately before enrolling in the health plan. This is called the "look-back period." The period for which a group insurer can deny coverage for a pre-existing condition is called an "exclusion period" and can last no longer than 12 months for most applicants (up to 18 months if someone is a so-called "late applicant," someone who missed the annual open enrollment period for the health care plan).

Some group health plans apply these exclusion periods to their members' coverage while others do not. When someone signs up for insurance (usually as part of starting a new job), they should receive a notice in the summary plan description that will detail if the plan might apply a pre-existing condition exclusion.

HMOs

Health maintenance organizations (HMOs) and other managed care plans usually do not apply pre-existing condition exclusions, but they can apply what is called an "affiliation period". An affiliation period is the time before HMO coverage begins.

During an affiliation period, enrollees do not receive any benefits and do not pay any premiums. According to HIPAA regulations, an HMO affiliation period cannot last longer than two months, or three months for a late enrollee. In addition, the HMO cannot apply exclusion periods.

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