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What is Pre-existing Condition Health Insurance?

What is Pre-existing Condition Health Insurance? Let's Find Out

A pre-existing health condition may make getting your insurance policy a wee bit more difficult. Here's what you can do to try working around it.
Arjun Kulkarni
Last Updated: May 31, 2018
Health insurance policies are financial arrangements primarily devised with the thought, that should the policy holder suffer some kind of health problem or imminent hospitalization sometime during the tenure of the health insurance cover, the insurance company ought to take care of all the costs that may be incurred.
In return, while the policy holder is in the pink of health, he will pay sums of money as premiums for keeping the insurance policy going. But of course, if you have some sort of pre-existing health condition, the chances of the insurance company having to finance your medication and other associated expenses are not so high. It can be said that the insurance companies become more careful to hand out an insurance policy in such cases.
Explaining a Pre-existing Medical Condition
The term 'pre-existing condition' is used when a person applying for health insurance has some sort of serious health issue already. How serious a health issue are we talking about here? Well, the definition is a bit loose, but chronic and long-standing health problems such as heart disease, cancer, high blood pressure, and diabetes are commonly brought under this category.
This becomes tricky business, both for you and for your insurance provider. The chances that your insurance provider will not detect a health condition are rare, because they conduct pretty detailed tests to monitor your condition. There is practically no way in which a medical condition could get overlooked.
If they find a problem which comes under their definition of a health condition, they will be a little wary of providing a health insurance policy. The way insurance companies see it is that you are a loss generating proposition for them, because they have to pay your sizable medical bills, and there is less guarantee of returns. Hence they can basically offer you two options.
Higher Premium
The insurer wants to break even and make a profit, so there is really no way that he is going to incur a loss on you. Therefore, your premium on the insurance will be a bit higher. The way they see it, they don't want to make a loss in case of hospitalization costs and high medical bills, so a higher premium might help them cover those costs. So when you go in to get a pre-existing condition health insurance, you will in all probability be asked to pay a higher premium. It can be said in other words, that your chances of getting a low-cost health insurance plan are quite low indeed.
Pre-existing Condition Exclusion
The other option that a person with a pre-existing medical condition seeking insurance has, is to opt for exclusion. This little clause in the insurance agreement says that, should the policy holder suffer from any kind of health problem, other than one which is directly related to his or her present medical condition, then the insurance company will take care of all those costs.
Also if a pre-existing condition is diagnosed and treatment was received within 6 months before your application date, then you may be eligible for an exclusion of the condition. This rule may vary from state to state and from one insurance company to other. Hence, you have to check the laws in your state as well as the rules of your insurance company. The costs related to the medical state will then have to be borne by the policy holder himself.
Now the thing here is that the exclusion is only for a period of time. So should you opt for a long term policy, you will be insured for the pre-existing condition once it is over. But it is more likely that the insurer will give you short term health insurance policies instead.
As you can see, the health insurance coverage can be a bit tricky and may work against you. Hence it is always better to get a health insurance early in life and for a longer term.