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EDUCATING INDIVIDUALS AND FAMILIES ABOUT APPROPRIATE AND AFFORDABLE
MEDICAL / HEALTH INSURANCE OPTIONS

What is a pre-existing condition clause?

Many individuals do not even look at options outside of the plans offered by thier employers.  Many times the reason for this is that they believe that any conditions that they currently have would not be covered by a new plan, but this is incorrect.

The pre-existing condition clause is actually defined as:

The overriding federal law that is the backdrop for the preexisting condition clause is called the Health Insurance and Accountability Act of 1996 passed by Congress during the Clinton Presidency.

It basically states that a preexisting condition can only be classified as a condition that was in effect six months prior to the effective date of the policy, and, further, it can only be excluded for one year after the effective date of the policy.

What does all this mean? When one completes an application for health insurance that provides full coverage, they are asked medical questions pertaining to their medical history. If a person is honest and lists a preexisting condition then it will simply follow the policy guidelines as to execution, however, if a person does not list a condition, through an admitted and “permission-sought” procedure, the insurance company can check a virtual medical bureau of people’s health called The Medical Information Bureau and through information seeking methods locate said medical history.

If we follow the procedures with respect to policy processing, I think we get more information than we bargained for. The person who assesses and approves a health application is called a medical underwriter. When a policyholder has a claim, it is processed by a claims examiner. Most companies spend more time examining claims than underwriting; the reason is obvious. At time of claim a preexisting condition may present itself or may lead to other conditions. The claim may show that the policyholder wasn’t honest at time of application necessitating a lot of expensive and time consuming research. If a person was dishonest enough, the policy may be “rescinded”; it never happened.

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