Pre-existing Condition Exclusion Period: Definition and Limits

What Is the Pre-existing Condition Exclusion Period?

The pre-existing condition exclusion period is a health insurance provision that limits or excludes benefits for a period of time. The determination is based on the policyholder having a medical condition prior to enrolling in a health plan. The Affordable Care Act (ACA) drastically curtailed pre-existing exclusion periods, but they can still occur.

Key Takeaways

  • In the past, if individuals could prove that they had creditable coverage before joining the new plan, the exclusion period could be waived.
  • 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.
  • Today, insurers cannot deny coverage to somebody based on pre-existing conditions, nor charge more.
  • A pre-existing condition is any health problem or ailment that was previously diagnosed at the time of applying for coverage.

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 conditions that don't qualify as pre-existing, such as the flu.

All Health Insurance Marketplace plans must cover treatment for pre-existing medical conditions. Medicare also typically covers pre-existing conditions without lengthy waitlists.

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.

Prior to HIPAA, workers with chronic health problems or ongoing treatments and medication often felt forced to stay in their current job because a new employer's health plan could impose a long wait for coverage or refuse to cover any cost for the condition at all. The act set guidelines on how and when insurers could exclude health coverage from individuals who had pre-existing conditions before joining the policy.

HIPAA did allow insurers to refuse to cover pre-existing medical conditions for up to the first 12 months after enrollment, or 18 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 for which the exclusion period will last.

Reducing the Pre-existing Condition Exclusion Period

Individuals can reduce the pre-existing condition exclusion period by proving that they had creditable coverage before joining the new plan, usually with a certificate of continuous coverage from the previous insurer, which may also be able to offer other forms of proof.

Insurers have to provide a written notice indicating that a pre-existing condition is applied, and the exclusion period countdown begins immediately after any plan-required waiting period. In some states, insurers may place additional restrictions 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, it is illegal for insurance companies to deny coverage to or charge more for people with pre-existing conditions of any kind. "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."

The Affordable Care Act has blocked many insurers from being able to impose the pre-existing condition exclusion period, but it does still occur. This happens usually because the periods have legacy acceptance built in from previous policies; this sort of policy, purchased before March 23, 2010, is called a "grandfathered health plan."

What Is a Pre-existing Condition?

A pre-existing condition is any health problem, like diabetes, or cancer, that you had before the date you applied for insurance. Insurers cannot refuse to cover treatment for your pre-existing condition or charge you more under the ACA.

For How Long Can a Pre-existing Condition Be Excluded?

The Affordable Care Act made it difficult to exclude pre-existing conditions from coverage. As a result, employer-sponsored group health plans almost never have them, although a new employee may have to wait up to three months for coverage overall. As soon as the plan becomes effective, they are fully covered, with no exceptions for pre-existing conditions.

The same goes for individual insurance purchased through a state or the federal health marketplace. Should a non-ACA-compliant plan still exclude pre-existing conditions, in most cases, it can only do so for a certain period—12 or 18 months, depending on when you enrolled.

Can I Get Coverage If I have a Pre-existing Condition?

Yes. Under the Affordable Care Act, health insurance companies can’t refuse to cover you or charge you more just because you have a pre-existing condition— that is, a health problem you had before the date that new health coverage starts. The only exception to the pre-existing coverage rule is for certain "grandfathered" individual health insurance plans—the kind you buy yourself, not offered through an employer. They don’t have to cover pre-existing conditions.

Do Short-Term Health Plans Cover Pre-existing Conditions?

No, short-term health plans usually don't cover pre-existing conditions, and claims will be denied if the service or treatment results from one. The length of time that short-term policies “look back” for pre-existing conditions varies by state, ranging from the previous six months to five years.

Can Pregnancy Be Considered a Pre-existing Condition?

No, pregnancy cannot be considered a pre-existing condition, thanks to the Affordable Care Act. (Previous to the act's passage in 2010, it could be.) Also, newborns and newly adopted children who are enrolled in a plan within 30 days cannot be subject to pre-existing condition exclusions.

Article Sources
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