The “pre-existing condition” is the insurance company’s method of taking your premiums for a period of time before they pay any of your claims.
Most insurance companies define pre-existing conditions as those for which you have been treated during the 180 days preceding their issuing a policy to you, provided that you did not have insurance during the 180 preceding their issuing a policy to you. Most people scratch their heads. Here it is in layman’s terms.
1. If you have been continuously covered with health insurance before you change insurance companies, you may need not worry about this.
2. If you have had a lapse in your coverage (in some cases as little as 43 days), the insurance company feels that they should not have to pay for something that you could have taken care of or might have contracted during a time when you were not covered.
3. If you have not had insurance prior to this company, you will pay premiums for a minimum period (normally between one to two years), before the insurance company will pay for your treatment. Some exclusions do apply, and we will cover those a little later.
Insurance companies carry the “pre-existing condition” clause to protect themselves from those who are diagnosed with catastrophic illnesses before they choose to get insurance in an effort to have someone else foot the bill for their care. Many people argue this practice is insensitive, but others say it is just good business. Others still think this is the only way to protect the companies from bankruptcy (i.e. paying out more than they receive in premiums).
Since the insurance company knows it will eventually pay for your illness, they want money up front. This allows them a chance to never pay for your illness. Three things could happen where they will never have to pay:
1. You die. This is dramatic, but true.
2. Your policy cancels. Policies end for many reasons, the most common being failure to pay premiums and change in eligibility (changing employer).
3. You are cured. Many courses of treatment are completed in six to twelve months. Not paying for your treatment for most of its course saves the insurance company money.
Exclusions can be a good thing in many cases. Insurance is not one of them, however. Certain illnesses are excluded from insurance coverage altogether after the “pre-existing condition” period expires. Examples of exclusions are: diabetes, cancer, hemophilia, hepatitis, AIDS, HIV and certain specific terminal illnesses. If you have one of these illnesses and have not been continually covered by insurance, your new insurance company will likely never pay for treatment and/or prescriptions.
Insurance companies reserve the right to deny payment of claims that are specific to each policy. Reading the policy before you purchase is the only real way to know what your particular company will cover and what they will deny. It is a contract, like any other, and should not be entered into lightly.