What is a Pre-Existing Condition? - Definition & Laws

Instructor: Artem Cheprasov

Artem has a doctor of veterinary medicine degree.

In this lesson you will learn the definition of a pre-existing condition and observe how pre-existing conditions affected health care coverage prior to the Affordable Care Act. We will also look at how the law handles pre-existing conditions under the Affordable Care Act.

What is a Pre-Existing Condition?

John is a pretty average guy. He's like your next-door neighbor. He mows the lawn on the weekends, he works as a plumber, and he also supports two kids. In 2006, John was having a hard time getting approved for health insurance. After being rejected by a number of health insurance plans and companies, he finally found a company that agreed to cover him. However, he was required to pay a hefty monthly fee that greatly ate into his budget.

Why did this happen? John had a pre-existing condition, a medical problem that exists prior to being approved for coverage by a new health insurance plan and company. Basically, John had a significant health problem. A pre-existing condition is typically a chronic health problem that is expected to continue for a long time. These conditions are commonly related to cancer, heart disease, diabetes, and respiratory conditions like emphysema.

The Laws Before 2014

In 2006, the laws were different in the U.S. in terms of how pre-existing conditions were addressed. When someone like John applied for new health insurance coverage prior to January 1st, 2014, and they had a pre-existing condition, a health insurance company could easily and legally deny that person health care coverage. Or, if they approved the coverage, it would be for far higher monthly fees than those charged to a person who did not have a pre-existing condition.

Why was this the case? Insurance companies are, quite simply, companies. Their primary goal is to make a profit. People with pre-existing conditions are more likely to require expensive health care, especially over the long term, compared to people who don't have a pre-existing condition. As a result, companies would often charge higher premiums, or monthly payments, to a person with a pre-existing condition. Alternatively, companies might force these people into a waiting period prior to starting coverage, or simply deny them coverage outright in order to save on costs. Being denied coverage often forced people to pay for expensive health care out of their own pocket, something many couldn't afford, causing their health to suffer even more.

The Laws After 2014

Fortunately, the laws have changed. Once the Affordable Care Act (ACA) was passed, no one with a pre-existing condition could be denied health insurance coverage after January 1, 2014.

John can now apply for health insurance on what's called the health insurance marketplace, and get covered despite his pre-existing condition. The health insurance marketplace, sometimes called the health insurance exchange, is run at either the state or federal level. If the state you live in hasn't set up its own marketplace, you'll use the federal health insurance exchange to apply for and purchase health insurance.

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