Health Insurance Insights Network

Ask the average person and they would tell you a pre-existing condition is a major disease like cancer. The reality is rather different. The insurance industry treats you policyholders as nothing more than a bank account. It takes your money so long as you are well, and cancels whenever it is at risk of having to pay out. In the same vein, it refuses any pre-existing condition. As an example, thyroid disease is a not-uncommon problem. Whether a person is under or overactive, there are cheap generic drugs to keep all the major symptoms under control. Indeed, you probably know several people who have a thyroid problem, but you are not aware of it. They live perfectly normal lives and are not a burden on the healthcare services. Yet, such people are almost completely uninsurable. While it is true that the underactive can find it difficult to prevent their weight from rising and so increasing the risk of diabetes and heart disease, this is the same risk as the majority who just eat too much. Since insurers do not treat overeating as a pre-existing condition, those with an underactive thyroid should not be discriminated against.

The new healthcare law is designed to help people to get coverage. As from September, insurers will not be allowed to refuse children because of their medical histories. In 2014, when the mandate to buy coverage comes into force, the same rule is to apply to adults. Thirty-five states already have high-risk pools but some, like California, have not controlled premium rates and the coverage is not generally affordable with low caps on total claims. During the next four months, the remaining states are to begin creating their own high-risk pools. The federal government is also to establish a national pool. It is not yet clear who will be allowed to buy through this pool. Indeed, there is a general air of uncertainty about the way in which the pools are to work, e.g. whether states like California will have to modify their existing schemes to comply with federal guidelines. Given the short time available for states to begin compliance, this lack of clarity is unsettling. The US Department of Health and Human Services is tasked with writing regulations. This makes practical compliance by the states challenging.

The simple solution would be to allow the states with pools to offer the federal pool alongside their own. The states without a pool can start drawing up their own regulations without having the DHHS guidance to hand. However, uncertainty remains. The California pool requires applicants to prove they have been repeatedly refused coverage. Suppose the federal rules only require an individual to have been uninsured for six months. Similarly, suppose the states allow insurers to add up to 35% to the premium rates for high-risk plans, whereas the federal rules insists the standard commercial rates apply.

This does not change the underlying plan which is to give those with any pre-existing condition access to individual health insurance within the next four years. For those who currently have no way of getting any coverage, this is a major step forward. The fact there are still details to be clarified does not prevent this from being a major improvement on the current reality in forcing health insurance companies to cease discriminating against those with any long-term health issue.