What Is a Pre-Existing Condition?

The term pre-existing condition refers to a known illness, injury, or health condition that existed before someone enrolls in or begins receiving health or life insurance. This includes illnesses such as heart disease, diabetes, cancer, and asthma. The majority of these conditions are generally considered to be long-term and/or chronic.

Insurance companies could deny individuals coverage or increase the cost of their premiums based on any pre-existing conditions. The Affordable Care Act (ACA) made it illegal for insurance companies to deny coverage to or charge more for people with pre-existing conditions of any kind.

Key Takeaways

  • A pre-existing condition is a health condition that existed prior to applying for health or life insurance.
  • Conditions include illnesses like diabetes, cancer, and heart disease.
  • Under the Affordable Care Act, health insurance companies can’t refuse coverage or charge more for pre-existing conditions. 
  • It is possible to buy life insurance from some companies if you have a pre-existing condition, but premiums may be higher and death benefits lower.

Understanding Pre-Existing Conditions

A pre-existing condition is a health problem, injury, or illness that an individual has before they sign up for or receive health insurance coverage.These conditions include serious illnesses, such as diabetes, cancer, and heart disease, and less serious conditions, such as a broken leg, and even prescription drugs.

The Affordable Care Act, also known as Obamacare, which was signed into law by President Barack Obama in 2010, made it illegal for health insurance companies to refuse coverage to individuals or charge them more for having a pre-existing condition. The law also mandates that health insurers cannot limit benefits or, once coverage begins, to refuse to cover treatment for a pre-existing condition. These rules went into effect for plans beginning on or after Jan. 1, 2014.

Prior to the ACA, health insurance companies would not cover pre-existing conditions until a specified period of time passed. In some cases, certain insurers didn't cover them at all. This left certain individuals without insurance coverage, meaning they were responsible to cover the full cost of any medical treatment they received out of their own pockets. The high cost of serious medical expenses often left previously uninsurable people financially devastated.

The pre-existing coverage rule does not apply to grandfathered health insurance policies—policies purchased on or before March 23, 2010, that weren't changed to reduce benefits or increase costs to consumers.

Special Considerations

Although the ACA was adapted to prevent health insurance companies from denying coverage to or raising rates for those with pre-existing conditions, no such provisions exist for life insurance companies. This means life insurers are not bound by these rules. As such, you can be denied coverage. Insurance underwriters determine your eligibility based on a number of factors, including your overall health.

But that doesn't mean you're precluded completely. You can still a buy life insurance policy even if one insurer denies you coverage because of a pre-existing condition. You may, however, be charged a higher monthly premium compared to someone of the same age who is healthy. Your death benefit may be lower, and your policy will also likely include a waiting period.

54 million

The number of Americans—or 27% of all adults under 65—who have pre-existing health conditions, according to the Kaiser Family Foundation.


Repealing Obamacare: Pre-Existing Conditions

Donald Trump signed an executive order in September 2020 allowing pre-existing conditions protections to stay in place if the Affordable Care Act is repealed. Repealing the law was one of Trump's central campaign promises and the administration moved to make that a reality in March 2019. Legal experts, though, maintained that the executive order was not enforceable because it has no authority to regulate the insurance industry.

In a letter to a federal appeals court, officials in the Department of Justice said they agreed with a federal judge in Texas who declared the health care law unconstitutional and added that it would support the judgment on appeal. Other Republican-led states also believe the law is unconstitutional.

That stance changed, though, when Joe Biden won the 2020 election. The DoJ said it no longer supported efforts by Texas and 17 other states to overturn the law. The Supreme Court ruling is expected in the spring of 2021.