Advocacy and Public Policy

Insurance and "Pre-Existing Conditions"

Surveys have shown that as many as 4 million people fear leaving their jobs because they are worried they’ll be denied health insurance at a new job because of a “pre-existing condition” – either their own or a family member’s. This is a particularly critical issue for people with disabilities.

In 1996, the federal government took one step toward solving this problem when Congress passed the Health Insurance Portability and Accountability Act (HIPPA). Michigan also tried to help people with pre-existing conditions get and keep coverage in its Patients Rights Bills passed in 1996. This article will examine how those provisions are supposed to work for group coverage. In another article, we will examine pre-existing conditions and individual insurance.

HIPPA says that insurers cannot limit or deny coverage under group health plans for pre-existing medical conditions for more than 12 months. What’s more, a person gets credit toward the 12 months for any months of prior insurance as long as there was never a gap of more than 63 consecutive days without coverage during the 12 months. For example, if you work for X Company for 9 months and then go to work for Y Company without a gap of more than 63 days without insurance, Y’s insurer must cover your pre-existing condition after 3 months on the job, which is when you have 12 total months of coverage.

Michigan’s law is even stronger: Blue Cross/Blue Shield and HMOs cannot refuse coverage in any group plan for pre-existing conditions, and other insurance companies can only exclude coverage for a pre-existing condition for six months.

What is a “pre-existing condition” under HIPPA? It is a condition that has been diagnosed, treated, or for which treatment has been recommended, within the previous six months. If you have a condition that has not been treated nor recommended for treatment in more than six months, the condition must be covered by your insurance, because it doesn’t meet the definition of “pre-existing”.

What prior insurance counts toward the 12 months? The following count as long as there are no gaps of more than 63 consecutive days in coverage:

Individual health insurance coverage
Medicare, Parts A and B
Most Medicaid coverage
Armed forces health care
Medical care program of Indian Health Service or tribal organization
State health benefits risk plans
Public health plans
Peace Corps health plan
Ongoing group insurance you pay for under COBRA

So what’s the catch? What you have to watch out for is whether the service you need for your condition is covered for anyone with the same condition in your new plan. For example, your old plan covered physical therapy for your disability. If your new plan doesn’t cover physical therapy for anyone, it doesn’t matter if you’ve had 12 months of prior coverage: you won’t get physical therapy.

Help us investigate this issue: When HIPPA and the Michigan Patients Rights Bills were passed, people were hopeful the laws would help ensure health care for people with disabilities or chronic health problems. UCP Michigan is investigating a number of insurance issues faced by people with disabilities, and we would like to know about denial of insurance coverage for pre-existing conditions. If you have information or questions on this topic, please contact us at 800-828-2714 (in Michigan) or ucp@ucpmichigan.org.

View a Printer-Friendly Version

E-mail to a Friend