Pre-Existing Conditions with Short Term Health Insurance
Pre-existing conditions are a big deal in the insurance world, especially when it comes to short term health plans. Generally speaking, pre-existing conditions are medical problems that predate your insurance policy. Different companies define “pre-existing” in different ways, with some going back as many as five years to exclude coverage and others considering problems only within the last year. These conditions may be anything for which you’ve experienced symptoms or sought treatment, mild or serious before your policy took effect. Even brief conditions, like pregnancy, can be used against you when applying for temporary coverage. Before you sign up for a short term plan, understand the limits when it comes to pre-existing conditions.
Traditional Insurance vs. Short Term Insurance
By law, major medical plans cannot currently take into account pre-existing conditions when approving you for a plan or determining your rates. The Affordable Care Act put a stop to that in 2014. With Obamacare-approved plans, you don’t have to worry whether an insurance company will turn you down because you suffer from allergies, deal with diabetes, had a suspicious mole removed last month or suffered a heart attack a few years ago. Furthermore, insurers can’t refuse to pay for treatment related to your pre-existing conditions. Insurers today can’t use medical underwriting in determining rates, either, which means that you’ll pay the same rate for your coverage as a healthy person in the same age category regardless of your medical history.
It’s an entirely different story for temporary health plans. These insurance policies don’t play by the rules of the ACA because they don’t have to, which can mean trouble for those with pre-existing conditions. Temporary plans aren’t considered minimum essential coverage under the law, and short term insurers can freely deny applicants due to pre-existing conditions. If an insurer accepts your application despite your medical history, it can deny claims related to those excluded conditions.
For example, if you have allergies, an insurance company might still agree to give you a short term health plan. The allergies would probably be considered a pre-existing condition, however, so the insurance plan wouldn’t pay for your allergy shots. If you were exposed to an allergen and had to rush to the emergency room for breathing treatments, you’d have to pay for that ER visit yourself.
How to Define Pre-Existing Conditions
Short term insurance companies take your health history into account to determine whether you have any pre-existing conditions. Some companies consider only what has happened in the previous six months. Others go back one or two years, and some even take into account a full five years of health history. The length of the “look back” period is determined not only by company policy but also by state regulations.
Insurance companies depend on the health information that you provide on your application for a temporary insurance plan. They require forthcoming answers to their medical questions so they can determine whether you have any conditions that fall into their definition of pre-existing.
Your application is not the company’s only source of information, though. Insurers can also ask your doctor to send medical records if they have doubts about current medical claims. There are even online databases that insurance companies can use to run a medical background check on you. In other words, don’t think that leaving a few incidents off of your application will keep an insurance company from knowing about them. And if an insurer finds out that you lied on the application, it can rescind coverage back to the effective date, meaning you’ll have to cover any claims paid on your behalf – not to mention the legal issue of committing insurance fraud.
Medical Underwriting for Short Term Plans
Short term insurance companies don’t have to accept you. These policies are medically underwritten, which means that insurance companies take into account your health status and other related factors, such as your age or gender, to determine whether they want to cover you. If you don’t meet their standards, they can determine that it’s not worth the risk to issue you a policy. Refusing to cover people with medical problems is how insurance companies keep the rates for short term policies low compared to major medical plans.
Not all pre-existing conditions carry equal weight with insurance companies, however, so it’s not a sure thing that you’ll be denied just because you’ve received a medical treatment in the past few years. Each insurance company sets its own criteria for determining pre-existing conditions and exclusion. The only way to really know whether an insurance company will take you is to apply for a short term policy and see what happens.
Medical underwriting is one of the reasons that short term plans are often considered best for people who are young and healthy. For older people or those with medical issues, ACA-compliant major medical plans offer better benefits and protection because insurers can’t turn you down for coverage.
Exclusions for Pre-Existing Conditions
Although major medical health plans are usually better for those with pre-existing conditions, there may be times when they’re not an option. Short term insurance can be a reasonable alternative. Sure, it’s usually a better option if you happen to be completely healthy, but an insurance company might be willing to take you even if you have pre-existing conditions on your medical record. Just know that if they do take you, they probably won’t take your condition. The insurance company will cover other medical needs for you, but they won’t cover anything that’s related to your pre-existing condition.
As an example, let’s say that you suffered a sports injury to your foot a few years back. Although it resulted in multiple doctor visits at the time, it’s now been well over a year since you’ve had to undergo any kind of treatment or therapy, so the insurance company decides to grant you a short term policy. However, the company stipulates that it won’t cover any care related to your former injury. If your foot starts to give you trouble again, you’ll have to pay for that treatment out of pocket. In fact, the insurance company may even specify that anything that could be loosely related to that injury – leg pains, for example – won’t be covered either. This is the fairly standard practice among short term insurers.
In a surprising move, one short-term insurance company introduced a plan in April 2018 that breaks all the typical rules about pre-existing conditions. The IHC Group offers a plan called the Connect Plus plan, which offers up to $25,000 of coverage for pre-existing issues. That might sound like a lot of money – and it is, compared to zero coverage with other plans – but $25,000 doesn’t go a long way in the medical world. A single surgery could cost four times that amount after factoring in doctor’s fees and follow-up care. But it is a nice option for people who need short-term insurance and wants a bit of protection for pre-existing conditions.
In general, though, pre-existing conditions usually make it tough to get a short term plan. Even if the conditions don’t preclude you from obtaining a temporary policy, you’re unlikely to receive any coverage for treatments related to those conditions. The plan’s benefits will be limited to new concerns that pop up during the term of your policy – still valuable if you break your arm, but significantly less comprehensive than an ACA-compliant plan.