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December 2016  Volume 9, Number 12        

long term care

Coverage for Pre-existing Conditions – When You Can’t Be Denied Health Insurance

The Affordable Care Act (ACA) includes a provision that prohibits health insurers from denying anyone coverage based on a pre-existing condition. But that provision does not apply to all types of coverage.

A pre-existing condition is a health issue that was present before the individual purchased a health insurance plan. This means that if you have cancer and decide to switch to a new insurance carrier or plan, you have a pre-existing condition. A health insurance carrier providing major medical insurance cannot deny you coverage. It also cannot charge you more than it would for someone who does not have the disease.

However, if you have a serious illness, you can’t assume that every health insurance plan will welcome you with open arms. While it might seem safe to assume that the ACA rule applies to all health insurance plans, it doesn’t. There are exceptions.

Grandfathered Plans

Grandfathered plans are non-compliant health insurance plans purchased before March 23, 2010. To qualify for grandfathered status, a plan can’t have significant changes that reduce benefits or increase costs.

The rules affecting these plans depend on whether the plan was purchased as an individual plan or through an employer on behalf of employees:

  • Individual – These plans cannot enroll anyone new; they cover only individuals and families who purchased them before March 23, 2010, and decided to remain in the plan.
  • Employer – New employees and family members can be added to the plan; but they can be denied coverage if they have a pre-existing condition.

These plans can stay in effect indefinitely.

Short-Term Health Insurance

Short-term health insurance is inexpensive and provides coverage for catastrophes, including major illnesses or accidents. It is a great option for anyone who is between coverage, such as someone who is starting a new job, but doesn’t have coverage yet. It also can be a less expensive option than the Consolidated Omnibus Budget Reconciliation Act (COBRA) coverage offered by the prior employer. Coverage typically lasts six months or less.

However, the ACA does not require short-term plans to provide coverage for pre-existing conditions. Some will deny coverage altogether. Others will accept you, but not cover any services for pre-existing conditions.

On the downside, short-term plans don’t offer all of the benefits required under the ACA. If you have this type of coverage, you could be charged a penalty by the federal government for not having compliant health insurance coverage.

Your Alternatives

If you currently lack health insurance and have a pre-existing condition, you can enroll in the government Marketplace. The open enrollment period for 2017 coverage started Nov. 1, 2016, and will end Jan. 31, 2017. If you enroll by Dec. 15, 2016, your benefits will start Jan. 1, 2017.

There are other options outside the open enrollment period, including:

  • Sign up for your employer’s group health plan – Many of these plans enroll annually at the end of the year and will accept pre-existing conditions.
  • Sign up for COBRA coverage if you quit work, are laid off, retire or are fired for reasons that do not include gross misconduct. COBRA is a federal law that requires employers who have 20 or more employees to offer former employees the right to continue coverage in the company’s group health plan for a certain amount of time.
  • Qualify for a special enrollment – If you have a special life event, such as having a baby, you can get coverage for your son or daughter at the time of their birth.
  • You can apply as soon as you qualify for Medicare, regardless of time of year. Medicare covers those who are age 65 or older or have a severe disability.
  • You can apply any time during the year for Medicaid, which is coverage for those whose income is below 100 percent of the federal poverty level (does not apply to all states).
  • You can apply any time for the Children’s Health Insurance Program (CHIP). The program provides low-cost health coverage to children in families who earn too much money to qualify for Medicaid. There’s no insurance plan to purchase, and some of the services are free, but there might be a monthly premium or a copayment for some services.


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In this issue:

This Just In...

Life Insurance Companies’ Dilemma — To Insure or Not to Insure Marijuana Users

What You Need to Know Before Purchasing Critical Illness Insurance

Coverage for Pre-existing Conditions – When You Can’t Be Denied Health Insurance

Life Insurance as a Gift? It’s Not as Crazy as You Think


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