Will Medicare Cover Pre-Existing Conditions?

The Prevalence Of Pre-Existing Health Conditions

Unfortunately, pre-existing health conditions are a concern for many older Americans. Approximately 86 percent of those in the 55-to-64-year-old age range have some type of pre-existing condition, according to the Centers for Medicare & Medicaid Services (CMS).

For these individuals, expenses related to the diagnosis, treatment, and maintenance of chronic health issues can really add up. In fact, the Centers for Disease and Control Prevention reports that expenses associated with some of the most common long-term conditions are costing our country and employers hundreds of billions of dollars each and every year.

• Arthritis – $304 billion per year
• Heart disease and stroke – $316 billion per year
• Diabetes – $245 billion per year
• Cancer – $174 billion per year (by 2020)
• Alzheimer’s disease – $159 billion to $215 billion per year
• Obesity – $147 billion per year
• Epilepsy – $15.5 billion per year

What determines whether these issues are a pre-existing condition?

Pre-Existing Conditions Defined

A pre-existing condition is “a health condition that exists before someone applies for or enrolls in a new health insurance policy,” according to the CMS. However, it is generally up to the individual insurance providers to decide which conditions fall under this definition.

Therefore, depending on the individual policy and what it says, pre-existing conditions can be anything from heart disease to asthma.

The CMS also explains that some companies label a healthy applicant as having a pre-existing condition if evidence exists that the person has ever had or was previously treated for a condition in the past.

In these cases, it’s understandable to think about whether it will impact being able to obtain insurance coverage under Original Medicare or other types of Medicare plans. Answering this question requires taking a closer look at what the law says about pre-existing health conditions and insurance coverage.

Pre-Existing Health Conditions, Insurance Coverage, And The Law

Effective Jan. 1, 2014, health insurance plans cannot refuse coverage or charge individuals higher rates when a pre-existing condition exists, per the U.S. Department of Health and Human Services.

In other words, you cannot be denied an Original Medicare policy (or any other health insurance policy for that matter) or be charged more for your policy just because you have a known health condition when you sign up.

This protection is provided under the Affordable Care Act. While it’s is good news for those who have been previously diagnosed with asthma, diabetes, cancer, or some other chronic health condition, it’s important to note that there is one exception to this law.

If you purchased your current health plan on or before March 23, 2010 and since then that plan has not significantly reduced your benefits or increased your costs, it is considered a “grandfathered” plan and therefore is not bound by this part of the Affordable Care Act.

Plans that have this grandfathered status must disclose this up front, according to HealthCare.gov. So, if you’ve had your current healthcare plan since before March 2010 and you want to know about where you stand, your provider is legally obligated to share this information with you.

Medicare Advantage (Plan C) Coverage With Pre-Existing Conditions

Medicare Advantage, also commonly known as Part C, refers to health insurance plans that offer the same basic coverages as Original Medicare. The only difference is that these policies are provided by private insurance companies as opposed to being supplied directly by the federal government.

Medicare Advantage still has the same restrictions regarding not being able to deny insurance based on pre-existing health conditions. However, under these types of plans, individuals with end-stage renal disease (ESRD) may face some limitations regarding Medicare coverage options.

According to Medicare.gov, those with ESRD typically apply for and receive Original Medicare because the eligibility for this condition alone is not age-based, but rather is granted if all of the following exist:

• The kidneys have stopped working.
• Dialysis is required on a regular basis or a kidney transplant has been received.
• The individual meets work-related requirements or is the spouse or child of someone who does.

Under Original Medicare, most if not all of the expenses related to diagnosis of and treatment for ESRD are covered. However, if you have ESRD and want a Medicare Advantage plan instead, Medicare.gov shares that you can only join this type of plan if:

• You were already enrolled in Medicare Advantage when diagnosed with ESRD.
• Your current health insurance company offers a Medicare Advantage Plan.
• You’ve had a successful kidney transplant that was needed as a result of ESRD and still qualify for
  Medicare.
• You qualify for a special type of Medicare Advantage Plan called a Medicare Special Needs Plan.

If one of these conditions does not exist, you cannot make the switch.

Medicare.gov adds that if you want to drop Medicare and go with a Marketplace insurance plan instead, you can withdraw your original application. If you do this, you are also required to repay any and all expenses previously paid by

Medigap And Pre-Existing Conditions

If you have just started to receive Medigap insurance—a policy that helps pay for some of the costs Original Medicare doesn’t cover, like copayments, coinsurance, and deductibles—Medicare.gov says that the Medigap insurance company can refuse coverage for out-of-pocket expenses related to pre-existing health issues for as long as six months.

They call this a “pre-existing condition waiting period” and it can be applied to any health condition that has been diagnosed or treated in the six months prior to the Medigap policy’s start date. Once the six-month waiting period has passed, the condition can be covered under the Medigap plan.

This waiting period can potentially be shortened, if not eliminated altogether, if you purchased the Medigap policy during your open enrollment period and this policy was replacing “creditable coverage.” But what is creditable coverage?

Medicare.gov defines creditable coverage as “previous health insurance coverage that can be used to shorten a pre-existing condition waiting period under a Medigap policy.” In order to apply, this previous health insurance policy must have existed for at least 63 days with no breaks in coverage.

If that previous policy was in existence for six months or more, Medicare.gov states that the insurance company providing the Medigap plan cannot impose a waiting period before providing coverage for a pre-existing condition.