A pre-existing condition is any personal illness or health condition that was known and existed prior to the writing and signing of an insurance contract. Health or life insurance policies will often identify a customer's pre-existing conditions before writing an insurance contract for that person, and will typically not cover pre-existing conditions until a specified period of time has elapsed. In some cases, pre-existing conditions may not be covered at all.

Breaking Down Pre-Existing Condition

Insurance companies typically do not wish to provide insurance coverage for pre-existing conditions, i.e., medical circumstances that are already known to exist.

For example, an insurance company would not be willing to write a fire insurance contract for a homeowner if the company knew that the individual's home had already been destroyed in a fire. In the same way, an insurance company would not be willing to write a life insurance policy for an individual who was already known to be terminally ill.

Insurance companies typically use one of two definitions to identify such conditions. Under the "objective standard" definition, a pre-existing condition is any condition for which the patient has already received medical advice or treatment prior to enrollment in a new medical insurance plan. Under the broader, "prudent person" definition, a pre-existing condition is anything for which symptoms were present, and a prudent person would have sought treatment. Pre-existing conditions can include serious illnesses, such as cancer, less serious conditions, such as a broken leg, and even prescription drugs. Notably, pregnancy is a pre-existing condition that will be treated regardless of prior treatment.

Pre-Existing Conditions and Current Law

Under current law, health insurance companies can’t refuse to cover you or charge you more just because a person has a pre-existing condition. These rules went into effect for plan years beginning on or after January 1, 2014. 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 also cannot limit benefits for a pre-existing condition. Once you have insurance, an insurance company can't refuse to cover treatment for a pre-existing condition.

The pre-existing coverage rule does not apply to “grandfathered” individual health insurance policies. A grandfathered individual health insurance policy is a policy that you bought for yourself or your family on or before March 23, 2010, that has not been changed in certain specific ways that reduce benefits or increase costs to consumers.