Does insurance gap affect pre-existing condition coverage?

Question

I might be unemployed for a few weeks and will lose health insurance during then. I'm trying to figure out what the implications are, in particular, whether I'd have troubles getting pre-existing conditions covered when I resume.

I find this:

Yes. Under the Affordable Care Act, health insurance companies can’t refuse to cover you or charge you more just because you have a “pre-existing condition” — that is, a health problem you had before the date that new health coverage starts. They also can’t charge women more than men.

which it seems too good to be true to me. I somehow had a vague recollection of a "look back" mechanism where the new insurance policy requires one to be covered in past N mouths, otherwise they will reject pre-existing conditions. Is this now prohibited by the quoted Act? Where should I be looking for such information?

Answer 1

Coverage for pre-existing conditions is one of the cornerstones of the Affordable Care Act. And yes, it also ended the practice of charging women more than men. Prior to its passage there were many insurance abuses that are no longer tolerated.

The constitutionality of the ACA is now before the Supreme Court and the verdict on its survival should arrive after the November election. Better get your insurance while you can, just in case.

Answer 2

Pre-existing conditions are an odd thing, and people are often mistaken about exactly what one is. To be totally clear, As of this writing, you cannot be denied coverage for a pre-existing condition in the U.S. Additionally, the essential benefits defined in the ACA require that your insurance must cover certain medical needs, mostly without exception.

1. What is a pre-existing condition?

A pre-existing condition is a medical issue that you already had before purchasing a health insurance policy. Health insurers frequently used to say that they were only accepting risk for medical events that took place after the policy was active. So if you got an insurance policy on Monday and broke your leg on Thursday, no problem! Except for your leg. The insurance would pay (all else being equal) for your medical bills, less your cost sharing portion up to your deductible.

But if you broke your leg on Sunday, and your insurance policy became active on Monday, the insurer might well have said "that leg was broken before the insurance policy assumed the risk. It's a pre-existing condition! So we won't cover the treatment costs for it." Even worse, insurers often said that any subsequent medical costs that were due to the broken leg were extensions of the pre-existing condition, and wouldn't cover those either. And they could get pretty creative and uncharitable about what medical issues were really pre-existing in nature.

And it could spiral-- once you developed a medical problem, you might not be able to find insurance that would cover it ever again. There were (and still are) insurance products that might cover such a condition, but they tended to be extremely expensive.

It can get more complicated, as is often the case with insurance, but that's the basic idea: a pre-existing condition is any medical issue which might require ongoing medical services to address which was present before an insurance policy was active.

2. Charging women (or other groups) more than men for coverage

Also previously very common, and also much restricted by the ACA. The most common method was individual underwriting, which adjusted insurance premiums upwards for people with greater medical risk. Women are a great example, as they famously are more likely to become pregnant than others. This elevated risk, from an actuarial perspective, was used to justify charging them higher premiums to offset their higher chance of medical costs.

Some degree of cost difference can still exist within an insurance plan, specifically due to age. However, the degree to which the premium costs can be raised is limited to a multiple of the "base" coverage rate.

3. Continuous coverage and pre-existing conditions

How insurance used to work was complicated, and is probably not worth focusing on too much at present. The laws and policies that used to exist may or may not come back into force if the ACA were to be repealed or weakened, but even in such an event how things were isn't necessarily how things will be. There have also been proposals for ACA replacements which incorporate a continuous-coverage criterion for pre-existing condition, but none of them have been enacted. Pre-existing conditions simply aren't a thing right now.

4. What to do if you lose coverage due to losing a job

If you're not able to move directly into a new job which offers its own insurance coverage, the most important thing to do is to speak with an HR representative at your (former) employer about COBRA. COBRA allows you to maintain your previous coverage, though you will have to pay the full premium to do so (and you might be surprised to find how much of it the employer was paying).

Even if you don't end up continuing the coverage through COBRA it is important for some insurance purposes to go through the process. This is especially the case if you are eligible for any sort of public insurance, such as Medicaid. States handle Medicaid differently, but it is not unusual for it to become unavailable if you flat-out decline other coverage which was available to you.

5. Where can I look for more information?

I recommend checking your state's ACA exchange website and/or seeking out and contacting an insurance broker in your state. These are great resources for health insurance information in general, and most importantly they will be familiar with the current laws and regulations in your state.