Pre-existing conditions, mischaracterized and an incomplete discussion

The Obama administration makes great fanfare about helping people with pre-existing conditions obtain health insurance. The Administration likes to characterize the issue as insurance company discrimination and “egregious insurance company practices.” See the HHS press release below. The reality is that people affected by pre-existing conditions have several existing options. Newborn children and new spouses usually have a period of time, typically 30 days, to enroll without concern for a pre-existing condition or a minimal waiting time for coverage related to the condition.

In addition, there are two existing laws that protect people with pre-existing conditions. COBRA guarantees an extension of coverage in the group plan for a period of time, generally 18 to 36 months. The Health Insurance Portability and Accountability Act of 1996 was enacted August 21, 1996. Under HIPAA individuals are protected from pre-existing condition waiting periods when changing or losing a job. HIPAA is being overlooked in the discussions about pre-existing conditions in favor of Obamacare. As long as someone is sufficiently responsible to keep coverage, with only short breaks, if any, then they can get new coverage. Responsible is the key word as it usually is. At no time in the discussion of health care reform have I ever heard why or how people get into the position of not having health insurance because of a pre-existing condition. Rather, we see the result and ignore the cause which is not insurance company practices.

Clearly a main driver for the absence of health insurance is cost, now and in the years ahead. That and some people simply playing the odds and not buying insurance. To think that is going away as a result of Obamacare is naive. The fact is that gaming the system will continue. In fact, the gaming ability will be enhanced when the health insurance exchanges are in place, when premiums are subsidized and community rating is required in setting premiums with minimal differentiation between even young and old. Even the mandate to carry insurance with its low penalty will not deter some people.

These costs will not go away, they will merely be spread among all insured Americans and the government.

Following is the text of a notice that has been included in employer health benefit plans for the last sixteen years. Note the last sentence.

HIPAA Certificates

Under HIPAA, after your medical coverage ends, the Plan Administrator will give you a written record of the coverage you had received through your Employer (referred to as a certificate of group health plan coverage) and, if applicable, under COBRA. You will receive a coverage certification when:
• Your coverage through your Employer ends;
• Your coverage under COBRA ends; or
• You request coverage certification (if the request is made within 24 months following the end of coverage).

If you obtain future employment, you may need to submit the coverage certification to your new employer. The coverage certification may reduce the duration of any pre-existing condition limit under the new plan by one day for each day of prior coverage you had, subject to certain requirements. If you are purchasing individual coverage, you may need to present the coverage certification at that time.

HHS Press Release

Barring Insurance Discrimination Based on Pre-Existing Health Conditions

By Kathleen Sebelius, Secretary of Health and Human Services

Posted November 20, 2012
Too often, I’ve heard from people worried that they couldn’t leave a job because they had diabetes or breast cancer and they wouldn’t be able to get health insurance on their own because of their pre-existing condition.

Thanks to the health care law, those fears will soon be a thing of the past. As part of the Affordable Care Act, HHS today proposed a rule that would prohibit some of the worst insurance industry practices that have kept affordable health coverage out of reach for millions of Americans.

Under this new rule, starting in 2014, families and individuals would see new protections from egregious insurance company practices, including higher premiums or the denial of health coverage because of a pre-existing condition.

No longer would women like Myrna Rodriguez Previte, a breast cancer survivor, have to struggle to find health coverage because insurance companies refused to cover her because she had cancer previously.

No longer would young adults like Abby Schanfield, who has a rare genetic parasitic disease that has required multiple surgeries, and Steven Giallourakis, a two-time cancer survivor with chronic health conditions, have to worry about being refused coverage or charged more because of their medical history.

The proposed rule that HHS is issuing today would guarantee that being sick will not keep you, your family, or your employees from getting affordable health coverage.

This rule builds off earlier successes of the Affordable Care Act, which prohibited health plans from denying children health coverage because they had a pre-existing condition.

To learn more about how this proposed rule would create a better health insurance market for consumers, please see this page.

Related articles

• HHS releases rules requiring coverage of people with pre-existing conditions (thehill.com)
• Pre-Existing Condition Rule Released (personalliberty.com)