Health Insurance What’s the Definition of a Pre Existing Condition

Everyone should know what a “pre-existing condition” is and how it will affect them when it comes to obtaining health insurance.

The definition of a “pre-existing condition” is exactly what it sounds like. A health condition which the person applying for health insurance already has. There is no difference between a condition which was diagnosed by a physician and one which has not been diagnosed yet. It also does not differentiate between a condition which is untreated or one which is being treated and is under control.

So, if a person has a “lump” and it has not been diagnosed; but, the average person would be aware of it, it is considered to be a “pre-existing condition”. Also, if someone is taking medication for something like high blood pressure; even if their blood pressure is well controlled, high blood pressure is still a pre-existing condition.

So how does this affect you when you are applying for health insurance?

If it is a “group insurance” policy being obtained through your employer; most states either require the insurance company to cover all pre-existing conditions OR they may not exclude those conditions for more than 12 months (the time varies depending on the state). With “group insurance”, they can not refuse to cover you.

If you are applying for a personal policy; the insurance company has four options:

1) they can accept the condition and cover future treatment
2) they can charge you an extra premium to help cover the cost of the treatment and provide coverage for the treatment of the pre-existing condition
3) they can exclude (waive) treatment for the pre-existing condition for either a specific period of time or permanently
4) they can refuse to insure you. If they refuse to insure you, it will either be a permanent refusal or a conditional refusal. In the case of a person who has a condition that has not been treated; they may state that upon successful treatment you can apply again. In the example of the person with the “lump”; removal and examination of the lump showing that it was benign and not cancerous would allow the person to reapply and become insured.

The “big” problem with “pre-existing conditions” and insurance companies is that in some cases it would cost the company more for treatment than they would ever receive in premiums. Maybe not “right now”; but they know some conditions progressively get worse and they have to consider the future also. Insurance companies are BUSINESSES. They need to at least break even and preferably make a small profit.

However, some people think they can wait until they have a problem before they need to pay for health insurance and then the insurance company will pay for their problem. They think they can “beat the system”. They fail to “mention” their problems on their application. The insurance company will go ahead and issue the policy; but, these people are not “safe” yet. Any treatment received through the insurance company during the first TWO years, a policy is in-force is subject to review.

During the review, if the doctor or patient indicate they had the problem BEFORE they applied and the “pre-existing condition” was NOT listed on the application; the insurance company is NOT required to pay any of the expenses. The insurance company can CANCEL the policy simply by returning the premiums paid by the patient minus any valid claims that were paid. The insurance company can also file formal charges of insurance fraud and send the person to prison. This is also the case for conditions which the medical profession say “had to be obvious” to the insured prior to signing the application.

I personally know of a case where this happened. A man developed a hydrocele (a fluid filled sac) and after a couple of years it was becoming painful and difficult to live with. He applied for a policy and did not “mention” it on the application. Four months later, he went in for surgery to have it removed. The size of the hydrocele was so large that the doctors said it had to have been growing for at least 2 – 3 years, possibly longer, because these take a long time to grow – no exceptions to the rule.

Considering the location of the hydrocele and it’s size, they said the patient HAD to have been aware of it at least a year prior to the operation. Needless to say, this man lost his insurance policy and had to pay for the surgery himself. He was very fortunate that they did not take him to court for this attempt to defraud the company.

So, now you know what a pre-existing condition is; how it can affect you when it comes to obtaining health insurance; and what can happen if you try to conceal or not list a pre-existing condition on your application.