Obamacare Bans Discrimination Against Those With Pre-Existing Illnesses

Insurance companies will soon no longer be able to deny health coverage to or charge more for individuals with preexisting conditions.

The Patient Protection and Affordable Care Act, the health care reform law nicknamed “Obamacare,” became law in March 2010, but many of its provisions are first being implemented in January 2014. Health care reform was created to allow more people to receive health care coverage at an affordable price, and one of the important elements of Obamacare, especially for those with disabilities, is the ban on discrimination based on preexisting conditions.

Before Obamacare

Prior to the enactment of Obamacare, individuals who had preexisting conditions, meaning they had an illness before their coverage began, generally would not be covered for those conditions (such as an existing heart condition or other chronic condition). Insurance companies would "look back" a certain amount of time, such as six months or three years, to see if you were treated for that condition during that time period. (States have  maximum limits on the length of the look back period for preexisting conditions; the longest is up to five years.)

If you had a preexisting condition that started within that look back period, the insurance company would not cover the preexisting condition for either a limited time or an unlimited amount of time (most states have limits on how long this exclusion can last).

An exception to the preexisting condition rule is if you have had continuous health insurance coverage. Generally, not having a lapse in your health care coverage prevents the preexisting condition exclusion from taking effect.

Coverage for Individuals

For individuals who purchased their own health insurance (not through an employer plan), insurance companies could choose not to cover you or charge you increased rates due to your preexisting condition. Individuals  with preexisting conditions may have struggled to purchase health coverage because the insurance company would not offer insurance to them or the price would be so high that it would not be possible to pay for the health coverage. If they were able to get health coverage, it could mean that the individual would have to pay out of pocket for any medical care associated with that preexisting condition for a period of time, if they had not had continuous health care insurance coverage. Many folks with chronic or disabling conditions turned to Medicaid for coverage.

After Obamacare

With the new health care reform, insurance companies are now banned from imposing preexisting condition exclusions on individuals, starting in January of 2014. In addition, insurance companies are not allowed to charge individuals more money for health insurance if they have preexisting conditions.

As of January 1, 2014, individuals with preexisting conditions will be free to be a part of a health plan without preexisting condition exclusions or increased rates. And starting October 1, 2013, the Health Insurance Marketplace will begin taking applications for health coverage. The Health Insurance Marketplace is an exchange that allows individuals to shop for lower cost health insurance options. The cost of your insurance will be based on your income. Many out-of-pocket expenses will be covered through the new health insurances offered in the Health Insurance Marketplace. Coverage for insurance purchased through the Health Insurance Marketplace will begin as early as January 1, 2014. Information on the Health Insurance Marketplace can be found at  www.healthcare.gov.

Preexisting Condition Insurance Plan (PCIP)

The Preexisting Condition Insurance Plan (PCIP) was created to cover those with preexisting health conditions from the time period between the time health care reform was passed and the enactment of the ban in January 2014. While closed to new enrollees since March 2013, PCIP was a new health coverage option for those who have preexisting conditions and were uninsured for at least six months. The federal government runs PCIP in 40 of the 50 states; the other states run the program themselves.

Those who did enroll in the PCIP will receive coverage until the ban becomes effective on January 1, 2014. As of January 1, 2014, PCIP will no longer provide coverage.  Information on PCIP, including information by state and other health coverage options for individuals with preexisting conditions, can be found at  www.pcip.gov.

Note on Maternity Coverage

Pregnancy is generally considered to be a preexisting condition. Before Obamacare, if you were pregnant when you joined an insurance plan that excluded coverage for preexisting conditions including pregnancy, you would not be covered for maternity costs.

Other insurance plans place a  waiting period on coverage for maternity insurance. For example, you often had to wait a year after joining a health plan to be eligible for maternity benefits. In January of 2014, the waiting period can be no longer than 90 days for all insurance companies.

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