“Pre-Existing Conditions” Affect Millions of Americans
A large proportion of Americans have health conditions that insurance companies can qualify as “pre-existing conditions.”
A pre-existing condition is a medical condition that existed before someone applies for or enrolls in a new health insurance policy. It can be something as prevalent as heart disease – which affects one in three adults1 – or something as life-changing as cancer, which affects 11 million Americans.2
But a pre-existing condition does not have to be a serious disease like cancer or heart disease. Even relatively minor conditions like hay fever, asthma, or previous sports injuries can trigger high premiums or denials of coverage.3
Unattainable Health Coverage
Insurance discrimination based on pre-existing conditions makes adequate health insurance unavailable to millions of Americans.
In 45 states across the country, insurance companies can discriminate against people based on their pre-existing conditions when they try to purchase health insurance directly from insurance companies in the individual insurance market.4 Insurers can deny them coverage, charge higher premiums, and/or refuse to cover that particular medical condition.
A recent national survey estimated that 12.6 million non-elderly adults5 – 36 percent of those who tried to purchase health insurance directly from an insurance company in the individual insurance market – were in fact discriminated against because of a pre-existing condition in the previous three years.6
In another survey, one in 10 people with cancer said they could not obtain health coverage, and six percent said they lost their coverage, because of being diagnosed with the disease.7
It is still legal in nine states for insurers to reject applicants who are survivors of domestic violence, citing the history of domestic violence as a pre-existing condition.8
Even when offering coverage, insurers can exclude whole categories of illnesses related to a pre-existing condition. For example, someone with a pre-existing condition of hay fever could have any respiratory system disease – such as bronchitis or pneumonia – excluded from coverage.9
Losing Coverage When You Need It Most
Thousands of Americans also lose health insurance each year through a practice called rescission.
When a person is diagnosed with an expensive condition such as cancer, some insurance companies review his/her initial health status questionnaire. In most states’ individual insurance market, insurance companies can retroactively cancel the entire policy if any condition was missed – even if the medical condition is unrelated, and even if the person was not aware of the condition at the time. Coverage can also be revoked for all members of a family, even if only one family member failed to disclose a medical condition.10
A recent Congressional investigation into this practice found nearly 20,000 rescissions from three large insurers over five years, saving them $300 million in medical claims11 – $300 million that instead had to come out of the pockets of people who thought they were insured, or became bad debt for health care providers.
At least one insurance company has been found to evaluate employee performance based in part on the amount of money an employee saved the company through rescissions.12 Simply put, these insurance company employees are encouraged to revoke sick people’s health coverage.