Before theAffordable Care Act(ACA) reformed health insurance in the US,pre-existing conditionsoften played a significant role in the health insurance coverage that people were able to obtain.
This article will explain what pre-existing condition exclusions are, how they affected health insurance prior to the ACA, and when they still apply today.
Before the ACA’s rules took effect in 2014, health insurance sold in the individual/family market (non-employer-sponsored) wasmedically underwrittenin all but six states. This meant that a policy could exclude pre-existing conditions altogether, come with higher premiums based on an applicant’s medical history, or simply be unavailable at any cost if the pre-existing conditions were serious enough.
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In the employer-sponsored market, individual employees who were otherwise eligible for the employer’s coverage couldn’t be declined or charged additional premiums based on their medical history (although both large and small groups' premiums could be based on the group’s overall medical history in many states).
But employees who couldn’t prove that they’d had continuous coverage were subject to pre-existing condition exclusion periods that varied in length depending on how long the employee had been previously uninsured.
Now that the ACA has been implemented, most people are no longer subject to pre-existing condition exclusion periods.
Pre-Existing Conditions
A pre-existing condition is a health problem that already existed (officially diagnosed or just symptomatic) before you apply for a health insurance policy or enroll in a new health plan.
Practically any medical issue could fall under the umbrella of a pre-existing condition in the pre-ACA days. Pre-existing conditions could range from something as common as asthma to something as serious as heart disease, cancer, and diabetes. Such chronic health problems that affect a large portion of the population were all considered to be pre-existing conditions.
How Pre-Existing Condition Exclusions Worked Before the ACA
Prior to 2014, when the ACA significantly overhauled the health insurance industry, some health plans would accept new enrollees but with a pre-existing condition exclusion period. This was a waiting period before coverage would be provided for anything related to the pre-existing condition.
This was more common for employer-sponsored plans than individual market plans, as individual market plans tended to take a more draconian approach to pre-existing conditions—excluding them indefinitely, charging higher premiums, or declining the application altogether. But some individual market plans did come with pre-existing condition exclusions for only a limited time.
UnderHIPAA(the Health Insurance Portability and Accountability Act of 1996), employer-sponsored (group) plans were allowed to impose pre-existing condition exclusion periods if a new enrollee didn’t have at least 12 months of creditable coverage (ie, had been uninsured prior to enrolling in the group plan) without gaps of 63 or more days. Eighteen months of creditable coverage could be required if the person was enrolling in the group plan late, after his or her initial enrollment window had passed.
Some states limited pre-existing conditions beyond HIPAA’s limitations, but they were generally something that people had to contend with if they experienced a gap in coverage before enrolling in a new plan prior to 2014.
In the individual market, HIPAA’s restrictions generally didn’t apply. Insurers in many states often looked back at five or more years of applicants' medical history, and could exclude pre-existing conditions for generally unlimited amounts of time.
Affordable Care Act
The Affordable Care Act altered the way pre-existing conditions are handled in the United States. In the individual/family market (ie, plans that people purchase on their own, as opposed to obtaining from an employer), health insurers are no longer allowed to take your health history into account when deciding whether or not to sell you a health insurance policy.
This has been the case since 2014, when the bulk of the ACA was implemented. Health plans cannot exclude a pre-existing condition from coverage, nor can they charge you more because you have a pre-existing condition.
The same is true for the employer-sponsored market. So group health plans no longer have pre-existing condition exclusion periods, regardless of whether the enrollee has a history of continuous coverage and/or pre-existing conditions. As soon as the enrollee’s coverage becomes effective, the person is fully covered under the terms of the health plan, with no exceptions for pre-existing conditions.
Note that the ACA does still allow employer-sponsored health plans to have waiting periods of up to three months before an employee’s coverage takes effect, so a new employee may have to work for a few months before being eligible to be covered under the employer’s plan.But once the plan takes effect, it cannot impose an additional waiting period on pre-existing conditions.
And the ACA also allows large group plans (but not small group plans) to have premium rates that are based on the group’s overall medical history. So individual employees cannot be singled out for higher rates based on their pre-existing conditions, but the overall medical history of the group can be taken into account to set the overall premiums for the group.
(In most states, “large group” means 51 or more employees, but there are four states where small group plans are sold to employers with up to 100 employees, and the large group market begins at 101 employees.Also note that large employers tend to self-insure rather than buy health insurance from an insurance company.)
Grandmothered and grandfathered plans purchased in the individual market are different though. They do not have to adhere to the ACA’s rules about covering pre-existing conditions and can continue to exclude members' pre-existing conditions.
Grandfathered individual market plans have not been able to enroll new members since March 2010, and grandmothered individual market plans have not been able to enroll new members since late 2013 (employers have not been able to purchase these plans since those same times, but existing group plans can continue to add newly-eligible employees). But if an existing enrollee already had a pre-existing condition exclusion, it can continue to apply indefinitely.
Pre-Existing Condition Exclusions and Medicare
Medicare covers pre-existing conditions, with no waiting periods. ButMedicare supplemental insurance(Medigap) can impose pre-existing condition waiting periods in some cases.
As soon as you’re 65 and enrolled inMedicare Part B(as well as Medicare Part A), your six-month initial enrollment window for Medigap will begin. During those six months, you can pick any Medigap plan available in your area. The insurer has to accept you regardless of any medical conditions you might have, and cannot charge you a higher premium based on your medical history.
But if you haven’t had continuous coverage before enrolling in Medicare (ie, if you had a gap in coverage of more than 63 days before your Medicare plan took effect), the Medigap insurer can impose a waiting period of up to six months before the plan will pay benefits for pre-existing conditions.
There’s no annual open enrollment period for Medigap like there is forMedicare AdvantageandMedicare Part D. So if you apply for a Medigap plan after your initial enrollment period ends, the insurer can look at your medical history to determine whether or not to accept your application, and how much to charge you (note that some states prohibit this, but most do not).
There are limited situations that trigger guaranteed-issue windows, during which you can sign up for certain Medigap plans and the insurer can’t reject you based on medical history.But even if you’re enrolling with a guaranteed-issue right and you didn’t have coverage in the 63 days before enrolling, the Medigap insurer can impose a waiting period of up to six months before the plan will cover your pre-existing conditions.
If you enroll in any of these types of coverage, you’re likely to find that pre-existing conditions are excluded. With any health plan, it’s always a good idea to carefully read the fine print. But that’s especially true if you’re buying a plan that’s not considered minimum essential coverage.
Summary
A Word From Verywell
If your health plan is fully compliant with the ACA and obtained in either the individual/family market or the employer-sponsored market, you no longer need to worry about pre-existing condition exclusion periods.
8 SourcesVerywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read oureditorial processto learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.Kaiser Family Foundation. Focus on Health Reform.Health Insurance Market Reforms: Guaranteed Issue.Centers for Medicare and Medicaid Services.The Health Insurance Portability and Accountability Act (HIPAA). Helpful Tips.U.S. Department of Health & Human Services.Pre-Existing Conditions.U.S. Department of Labor. Employee Benefits Security Administration.Ninety-Day Waiting Period Limitation.Centers for Medicare and Medicaid Services.Market Rating Reforms. State-Specific Rating Variations.KFF.2023 Employer Health Benefits Survey.Norris, Louise. medicareresources.org.Is there a best time to enroll in a Medicare supplement plan?Medicare.gov.Guaranteed-Issue Rights.
8 Sources
Verywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read oureditorial processto learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.Kaiser Family Foundation. Focus on Health Reform.Health Insurance Market Reforms: Guaranteed Issue.Centers for Medicare and Medicaid Services.The Health Insurance Portability and Accountability Act (HIPAA). Helpful Tips.U.S. Department of Health & Human Services.Pre-Existing Conditions.U.S. Department of Labor. Employee Benefits Security Administration.Ninety-Day Waiting Period Limitation.Centers for Medicare and Medicaid Services.Market Rating Reforms. State-Specific Rating Variations.KFF.2023 Employer Health Benefits Survey.Norris, Louise. medicareresources.org.Is there a best time to enroll in a Medicare supplement plan?Medicare.gov.Guaranteed-Issue Rights.
Verywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read oureditorial processto learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
Kaiser Family Foundation. Focus on Health Reform.Health Insurance Market Reforms: Guaranteed Issue.Centers for Medicare and Medicaid Services.The Health Insurance Portability and Accountability Act (HIPAA). Helpful Tips.U.S. Department of Health & Human Services.Pre-Existing Conditions.U.S. Department of Labor. Employee Benefits Security Administration.Ninety-Day Waiting Period Limitation.Centers for Medicare and Medicaid Services.Market Rating Reforms. State-Specific Rating Variations.KFF.2023 Employer Health Benefits Survey.Norris, Louise. medicareresources.org.Is there a best time to enroll in a Medicare supplement plan?Medicare.gov.Guaranteed-Issue Rights.
Kaiser Family Foundation. Focus on Health Reform.Health Insurance Market Reforms: Guaranteed Issue.
Centers for Medicare and Medicaid Services.The Health Insurance Portability and Accountability Act (HIPAA). Helpful Tips.
U.S. Department of Health & Human Services.Pre-Existing Conditions.
U.S. Department of Labor. Employee Benefits Security Administration.Ninety-Day Waiting Period Limitation.
Centers for Medicare and Medicaid Services.Market Rating Reforms. State-Specific Rating Variations.
KFF.2023 Employer Health Benefits Survey.
Norris, Louise. medicareresources.org.Is there a best time to enroll in a Medicare supplement plan?
Medicare.gov.Guaranteed-Issue Rights.
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