Pre-Existing Conditions? A Non-Issue For 9 out of 10 Americans…because of HIPAA!

Senators Nancy Kassebaum and Ted Kennedy Already Took Care Of Pre-Existing Conditions in 1996!

As of 2014, The Patient Protection Affordable Care Act precludes insurers from denying coverage or rating (charging extra) based on a pre-existing condition of an insured individual or their dependents.  But the majority of Americans already had that taken care of.

Large employers waive pre-existing condition limitations, while small employers are not subject to pre-existing condition limitations due to HIPAA.

When it comes to pre-existing conditions, they always seem to be in the news.  Especially in an election year.

And it is kind of a non-issue.

Why?  Because of Senators Nancy Kassebaum, Republican from Kansas, and Senator Edward Kennedy, Democrat from Massachusetts.

And, because 91% of Americans get their health insurance through their employer or the federal or state government according to the latest report from the Kaiser Family Foundation.  The latest data shows that 56% of Americans purchase insurance through their employer, 20% purchase through Medicaid, 14% through Medicare and 1% through the military.

And because only about 1 in 4 adults under 65 years of age have a pre-existing condition, according to a 2019 report from the Kaiser Family Foundation.

HIPAA

You know the law, it was signed in 1996 by President William Jefferson Clinton.

You know the law’s name.  It is called the Health Insurance Portability and Accountability Act.  

It is more commonly known as HIPAA and pronounced “HIP uh”.

Most people think of HIPAA as a law about privacy, but it is a lot more than that.  I am not going into the weeds on this one, though I easily could.

In the halls of the United States Congress before HIPAA was passed, the bill was known as the Kennedy-Kassebaum Bill because Ted Kennedy and Nancy Kassebaum co-sponsored it.  Further, the initial legislation was introduced in the US House of Representatives by Congressman Bill Archer, a Republican from Houston, Texas.  Imagine that…..a bi-partisan bill that passed!

Regarding pre-existing conditions, HIPAA says:

Any insurance company that offers group coverage must make that coverage available to any employer that wishes to purchase insurance coverage.  That means that insurance companies must guarantee the health insurance policy to be issued regardless of pre-existing conditions of any employee or dependent.

If you lose your job, you receive a Certificate of Creditable Coverage from your employer’s insurance company.  Former employees have 63 days to purchase a new plan and not be subject to any pre-existing condition limitation in your new policy.

Large Employers Waive Pre-existing Conditions

Large employers are considered to employ more than 50 employees, more than 100 employees or more than 200 employees depending on who is doing the talking.

The important point about large employers is that the insurance company waives pre-existing condition limitations as a concession to gaining the employers business.  If you are employed by a large employer, you most likely will not have an issue with pre-existing conditions.

Government Sponsored Health Insurance

Medicare, Medicaid and Tricare (military) are all guaranteed issue and not subject to pre-existing conditions.

The 9% Uninsured

As of 2014, pre-existing conditions are no longer a reason for not being insured.  But with the upcoming election, there is a chance things could change.

In my opinion, the uninsured do have options to get around pre-existing conditions, if that is the reason that they do not have or seek to have health insurance coverage.

  • Form a small business – small businesses with two or more employees are subject to HIPAA
  • Join an association – if your state permits Association Health Plans, and many do, seek coverage from an association you can join
  • Purchase individual coverage through an eligible insurance exchange – promptly and ahead of any future changes.

Don’t hesitate to contact me if you need help solving for pre-existing conditions or anything else that keeps you from being 100% covered.

Leave a Reply

Your email address will not be published. Required fields are marked *