Posted on Jun 16, 2014 by Simon Thomson
Pre-existing conditions can affect your health insurance policy significantly. It is vital that you understand what qualifies as a pre-existing condition, and that you disclose any that you have to your insurer when discussing your medical history at the start of your policy. If you do not tell your insurer about your pre-existing conditions, you could suffer huge medical costs down the line. Here we will outline the ways insurers can deal with pre-existing conditions, and will highlight the importance of making your insurer aware of your full medical history.
What are Pre-existing Conditions?
Firstly, we need to clarify just what pre-existing conditions are. Insurance jargon can be confusing, but it is important to understand what counts as a pre-existing condition, as roughly 50% of people buying new health insurance policies today suffer from some form of pre-existing condition. A pre-existing condition is any serious illness or injury that either affected you in the past and you have since recovered from, currently affects you and is still untreated, or an illness or injury you have displayed symptoms of without having had diagnosed before you apply for your health insurance. Whether you acknowledge your condition or not, if it displayed symptoms before you bought your policy, then it will count as a pre-existing condition. Some examples of pre-existing conditions include diabetes, torn ligaments, and cancer.
How Insurers Handle Them
It should be apparent that insurers are not very keen to cover pre-existing conditions. Covering these conditions presents your insurer with a virtually guaranteed future cost on your policy, as the likelihood is that you will need to receive treatment for your pre-existing condition at some point. For this same reason however, it is vital that if you do suffer from any pre-existing conditions, you talk to your insurer, give them an honest and accurate medical history, and see how or to what extent you can get coverage for your conditions. There are 5 main ways that an insurer will deal with pre-existing conditions:
- Accept your conditions and agree to cover them fully as well as your regular health insurance policy.
- Cover your pre-existing conditions through premium loading (a small monthly % increase on your normal premiums to cover the cost of covering your pre-existing conditions)
- Cover your pre-existing conditions only after a moratorium period (a period where you cannot make a claim regarding your conditions, typically lasting up to 2 years. If you receive treatment for your pre-ex conditions during this time, you must pay for it yourself and your insurer will not cover them even after your moratorium period is over.)
- Exclude coverage for your pre-existing conditions, but otherwise provide you with a standard medical insurance policy.
- Refuse to cover you entirely.
Which of these options your insurer chooses depends on the policy, the insurer itself, and the type or severity of the conditions you have. You may be asked to undergo some health tests to assess your overall condition and determine the risk to the insurer of covering your pre-existing conditions.
Pre-existing Conditions and Group/Company Insurance
Another option that may be available to you is coverage for pre-existing conditions through an MHD policy (Medical History Disregarded). This is a type of Group Health Insurance plan that disregards any pre-existing conditions for individuals because the policy covers an entire group. For the insurer, the premiums for the entire group easily outweigh having to pay for treatment for the occasional pre-existing condition.
Honest Medical History
It is really important that you are honest with your insurer and give as accurate a medical history as you can, so they can properly assess you and give you an accurate premium for your policy. If you do not disclose a pre-existing condition, and later need treatment for the condition, or even treatment for a separate injury or illness related to the pre-existing condition, then your insurer can refuse to cover you. This will leave you paying the bill yourself, and depending on where in the world you live, and the condition that needs treating, the costs of treatment could be astronomical (e.g. the cost of heart attack related treatments in the USA average US$5-8,000).
Rather than risk having to pay an enormous bill, take preventative measures now and tell your insurer about your pre-existing conditions.