Health insurance cannot be denied to an individual based on pre-existing conditions in the United States. This is because of the Affordable Care Act (ACA), also known as Obamacare, which was passed in 2010 and took full effect in 2014.
The ACA prohibits health insurance companies from wrongfully denying coverage or charging more for pre-existing conditions, which are any health problems, injuries, or illnesses that an individual has before enrolling in or receiving health insurance coverage. The ACA also requires health insurance plans to cover essential health benefits, such as preventive care, prescription drugs, mental health services, and maternity care.
However, there are some exceptions to this rule. For example, some health plans that were created before March 23, 2010 are considered “grandfathered” and do not have to follow the ACA’s rules on pre-existing condition discrimination. These plans can still deny coverage or charge more for pre-existing conditions, unless they lose their grandfathered status by making significant changes to their benefits or costs.
Another exception is for short-term health plans, which are temporary plans that last less than 12 months and are not regulated by the ACA. These plans can exclude coverage for pre-existing conditions and impose limits on benefits and services.
What Is the Current Status of the Pre-Existing Discrimination Ban?
The pre-existing discrimination ban is still in effect as of 2023. This means that health insurance companies cannot deny coverage or charge more to individuals who have pre-existing health conditions, such as asthma, diabetes, or cancer, as well as pregnancy.
When Does the Affordable Care Act Become Effective?
The ACA has many provisions that affect different aspects of the health care system, and some of them took effect at different times. Here are some of the key dates and milestones of the ACA’s implementation:
- March 23, 2010: President Barack Obama signed the ACA into law.
- June 28, 2012: The Supreme Court upheld the constitutionality of most of the ACA, including the individual mandate that requires most Americans to have health insurance or pay a penalty.
- October 1, 2013: The health insurance exchanges, also known as marketplaces, opened for enrollment. The exchanges are online platforms where people can compare and purchase health insurance plans that meet certain standards and offer subsidies for eligible individuals and families.
- January 1, 2014: Most of the ACA’s major provisions took effect, including the following:
- Guaranteed-issue coverage: Health insurance companies can no longer deny coverage or charge more to people with pre-existing conditions.
- Essential health benefits: Health insurance plans must cover 10 categories of essential health benefits, such as preventive care, prescription drugs, mental health services, and maternity care.
- Individual mandate: Most Americans must have health insurance or pay a penalty, unless they qualify for an exemption.
- Premium tax credits and cost-sharing reductions: People with incomes between 100% and 400% of the federal poverty level (FPL) can receive subsidies to help them afford health insurance premiums and out-of-pocket costs.
- Medicaid expansion: States can choose to expand their Medicaid programs to cover all adults with incomes below 138% of the FPL. As of March 2022, 38 states and Washington, DC, have adopted the expansion.
- December 22, 2017: The Tax Cuts and Jobs Act was signed into law, which reduced the individual mandate penalty to zero, effectively eliminating it starting in 2019.
- January 28, 2021: President Joe Biden signed an executive order to reopen the health insurance exchanges for a special enrollment period from February 15 to May 15, 2021, in response to the COVID-19 pandemic. The order also directed federal agencies to review and revise policies that may undermine the ACA or reduce access to health care.
- March 11, 2021: President Joe Biden signed the American Rescue Plan Act into law, which provided additional relief and support for the ACA, including the following:
- Increased premium tax credits for all income levels for two years (2021 and 2022), making health insurance more affordable for millions of Americans.
- Eliminated or reduced premiums for people who receive unemployment benefits in 2021.
- Provided incentives for states that have not expanded Medicaid to do so by increasing their federal matching rate for two years.
- Extended COBRA subsidies to cover 100% of premiums for eligible individuals who lost their employer-sponsored health insurance due to the pandemic.
As you can see, the ACA has become effective gradually over time and has undergone some changes along the way.
Pre-existing Medical Condition Exception: Grandfathered Plans
In the health insurance world, a “grandfathered” plan refers to individual health insurance policies that were in place before the Affordable Care Act became law in March 2010. These plans are “grandfathered” in the sense that they don’t have to meet all of the ACA’s requirements, provided they haven’t made certain significant changes that reduce benefits or increase costs to policyholders.
One of the most celebrated components of the ACA was its protection for individuals with pre-existing medical conditions. The ACA made it illegal for health insurance companies to refuse coverage or charge more for people with pre-existing health conditions. However, because grandfathered plans are exempt from some provisions of the ACA, they might not offer the same protections regarding pre-existing conditions.
Let’s dive deeper into how grandfathered plans may differ from ACA-compliant plans in terms of pre-existing conditions:
Coverage Exclusions
Before the ACA, it was commonplace for insurance policies to have a pre-existing condition exclusion period. This means that if you had a medical condition before the date that new health coverage starts, the insurance might refuse to cover any expenses related to that condition for a certain period, often up to 12 months or longer. Grandfathered plans might retain these exclusions.
Increased Premiums
Grandfathered plans could potentially charge higher premiums based on health status. Before the ACA’s protections kicked in, people with pre-existing conditions often faced higher insurance premiums. Though many grandfathered plans might not have changed their premium structures, they aren’t mandated to offer the same rate protections as newer ACA-compliant plans.
Lifetime and Annual Limits
The ACA prohibited insurers from imposing lifetime and annual dollar limits on essential benefits. However, some grandfathered plans might still have these limits, which can be problematic for those with chronic illnesses or conditions requiring expensive treatments.
Limited Essential Benefits
The ACA defined a set of essential health benefits that all new plans must cover, including many services crucial for those with pre-existing conditions, such as prescription drugs, hospitalization, and mental health services. Grandfathered plans are not required to cover this comprehensive set, potentially leaving gaps in coverage for those with certain pre-existing conditions.
Rescission of Coverage
Before the ACA, if an insured individual got sick, the health insurance company could search their application for any error, or in some cases, any technicality, to cancel (rescind) the policy unless the individual had been deceitful in their application. This meant people with pre-existing conditions, who genuinely forgot to mention a minor or unrelated condition, could be left without coverage when they needed it most.
Grandfathered plans might still have the ability to do this, whereas ACA-compliant plans cannot rescind coverage this way unless there’s evidence of fraud or intentional misrepresentation.
These examples underscore the importance of thoroughly understanding the nuances of grandfathered plans, especially for those with pre-existing conditions. As always, you are encouraged to scrutinize the details of their policies and consider the potential benefits of transitioning to an ACA-compliant plan.
What to Do If You Have a Grandfathered Insurance Plan?
Understanding your grandfathered health insurance plan is pivotal, particularly in terms of its provisions for pre-existing conditions. While some of these plans might offer coverage that’s on par with newer options, others may have clauses that limit or exclude certain benefits.
It’s worthwhile to periodically assess your grandfathered plan in comparison to the ACA-compliant options available in the marketplace. These newer plans can sometimes offer more comprehensive coverage, especially vital if you have pre-existing conditions.
Always keep an eye out for any updates or changes to your current plan. Significant alterations can strip the plan of its “grandfathered” status, compelling it to adhere to ACA standards.
Seeking Help from an Attorney
An insurance lawyer can provide you with guidance, ensuring your rights are protected and that you’re making informed decisions.
If you’re facing challenges with your insurance provider or need clarity on policy terms, don’t go it alone. LegalMatch can help connect you with insurance attorneys in your area. By simply providing some basic details about your situation, LegalMatch will match you with attorneys who are equipped to assist you.
Ensure your rights are protected and get the best possible outcome – reach out to an insurance lawyer through LegalMatch today.
