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How health reform impacts those with pre-existing conditions Posted: November 21st, 2010

By Maryalene LaPonsie

It is a common complaint of the current health care system in the United States: those in need of medical care may often be the least likely to have adequate health insurance coverage. In many states, group insurance policies can apply pre-existing exclusion limits to the coverage of new group member. Meanwhile, for those without access to group plans, individual medical insurance companies are allowed to outright deny coverage to those with chronic medical condition

The Patient Protection and Affordable Care Act (PPACA), often known simply as the health reform bill, changes how health insurance companies treat these individuals. Instead of being able to restrict claims for treatments related to pre-existing conditions, health insurance companies are expected to expand coverage options to those who are disabled or chronically ill.

However, these changes are to be phased in gradually. While some provisions have gone into effect already, others won't be implemented until 2014. If you or a family member has a pre-existing condition, these are the important dates to know:

  • March 23, 2010. Affordable Care Act signed into law
  • July 1, 2010. Target date for the launch of Pre-Existing Condition Insurance Plans.
  • September 23, 2010 Children with pre-existing conditions cannot be denied medical coverage
  • January 1, 2014 Health Insurance Exchanges begin offering coverage, and adults with pre-existing conditions cannot be denied coverage

Health reform and children with pre-existing conditions

Although PPACA takes four years to fully protect adults with pre-existing conditions, safeguards for children start in 2010. Among the provisions scheduled to go into effect on September 23, 2010 is a prohibition against medical insurance companies denying coverage to children with pre-existing conditions.

Currently, group insurers can impose a pre-existing condition exclusion period in which they do not provide coverage of treatments related to a pre-existing condition. The health reform bill specifically bans these exclusions for children younger than 19 years old.

In addition, families with sick and disabled children can be turned down for coverage through individual health plans. The PPACA does not specifically state that medical insurance companies must offer individual coverage to these families. However, after public concern was raised about whether insurers would exploit this as a loophole, the trade group America's Health Insurance Plans (AHIP) announced that its members would comply with expected government rules clarifying that children are not to be denied medical coverage.

New insurance options for adults with pre-existing conditions

While adults have to wait longer for the type of protection afforded to children come September, the government is providing a temporary solution in the meantime. All 50 states are required to maintain high-risk pools that are intended to provide affordable health insurance to individuals who have been denied coverage elsewhere.

Officially known as Pre-Existing Condition Insurance Plans, states can run their own plan, turn over administration to a non-profit or allow the federal government to take control. A July 1, 2010 target date for the establishment of the state and federal high-risk health insurance plans. However, creating these pools has been more complex than anticipated. While some states, such as Maryland and North Carolina, were prepared to launch their plans in July 2010, residents in other states must wait until August or September 2010.

Health Insurance Exchanges may provide the long-term solution

Then, in 2014, Health Insurance Exchanges take effect, and the pre-existing insurance plans disappear. As the cornerstone of the health reform legislation, the Health Insurance Exchanges are envisioned as a type of open-market where families and individuals can purchase affordable health insurance.

At the same time, adults receive protection against pre-existing condition exclusion periods and coverage denials. Just as children with pre-existing conditions in 2010 could not be discriminated against, in 2014, the same rules apply to adults. Not only is a health insurance company prohibited from denying coverage to an individual with a pre-existing condition, it also cannot charge that individual higher premiums solely because of his or her health condition.

Between the end of health-based discrimination in insurance underwriting and the creation of the Health Insurance Exchanges, the federal government asserts that all individuals with pre-existing conditions should have access to affordable, quality care by 2014.