What Does Pre-Existing Condition Exclusion Period Mean?

The pre-existing condition exclusion period is a health insurance benefit provision that places limits on benefits or excludes benefits for a period of time due to a medical condition that the policyholder had prior to enrolling in a health plan.

The Affordable Care Act's passage has blocked many insurers from being able to use this exclusion period but it does still occur. This happens usually because the periods have been grandfathered into previous policies. Medicare typically covers pre-existing conditions without lengthy waitlists.

How the Pre-Existing Condition Exclusion Period Works

A pre-existing condition exclusion period limits the number of benefits that an insurer has to provide for specific medical conditions, and does not apply to medical benefits afforded by a health insurance policy for other types of care. For example, a policyholder may be excluded from receiving benefits for a pre-existing heart condition for a period of months after starting a policy, but may still receive care for non-preexisting conditions, such as the flu.

Key Takeaways

  • In the past, if individuals could prove that they had creditable coverage before joining the new plan the exclusion period could be waved.
  • Some insurance carriers still have pre-existing condition exclusion periods but not many, thanks to the passage of the ACA.
  • Insurers in some states could have restrictions added on whether they can include a pre-existing condition exclusion period.

Conditions for Exclusion

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) requires insurers to provide coverage to individuals in group health plans and places restrictions on how insurers can restrict some benefits.

It set guidelines on how and when insurers could exclude health coverage from individuals who had pre-existing conditions before joining the policy. HIPAA allows insurers to refuse to cover pre-existing medical conditions for up to the first twelve months after enrollment, or eighteen months in the case of late enrollment.

Pre-existing condition exclusion periods are regulated policy features, meaning that the insurer is likely to have an upper limit on the period of time the exclusion period will last.

Individuals can reduce the pre-existing condition exclusion period by proving that they had creditable coverage before joining the new plan. The individual can prove this by showing a certificate of creditable coverage produced by the previous insurer or may offer other forms of proof.

Insurers have to provide a written notice indicating that a pre-existing condition is being applied, and the exclusion period countdown begins immediately after any plan-required waiting period. In some states, insurers may have additional restrictions placed on whether they can include a pre-existing condition exclusion period.

The ACA and Pre-Existing Health Conditions

Under the Affordable Care Act passed in 2010, "Health insurers can no longer charge more or deny coverage to you or your child because of a pre-existing health condition like asthma, diabetes, or cancer. They cannot limit benefits for that condition either. Once you have insurance, they can't refuse to cover treatment for your pre-existing condition."