Can Insurance Companies Deny Pre-existing Conditions?

A conundrum in health care is that insurance companies traditionally have granted coverage to those in good or moderate health, with pre-existing conditions often making applicants ineligible for policy purchase. This essentially denied care to people who would benefit most, or at the least, cause those with pre-existing conditions to pay more for care than they would with coverage. Because of changes in health care policies, the government is eliminating this practice.

Legislative Rules

• Prior to 2010, insurance companies had the right to deny consumers coverage based on pre-existing conditions. The rationale from the insurance companies was that insuring those with pre-existing conditions was too expensive, with claims digging into revenue and profit. Determined to make sweeping changes to health care, President Barack Obama eliminated the ability of insurance companies to deny based on pre-existing conditions through the Patient Protection and Affordable Care Act and Health Care and Education Reconciliation Act. These two laws both were passed in March 2010.

Effect Timeline

• President Obama's health care reform, like many other laws, is initiated on a roll-out system, meaning that it doesn't take effect immediately for all individuals. The legislation indicated that children with pre-existing conditions could get coverage six months after the passing of PPACA, so as of May 2011, insurance companies cannot deny coverage to children who already have a medical issue. Adults will be able to get coverage with pre-existing conditions January 1, 2014.

Benefits

• The obvious benefit of President Obama's health care reform legislation is that those who need health coverage the most -- those who suspect or know they are sick -- will have it. Overall, including those with no pre-existing conditions, the reform will provide coverage to an estimated 32 million people, say Jill Jackson and John Nolen of CBS News and Alan Silverleib of CNN. The laws also encourage better competition among insurance companies and increase company accountability, as pointed out by the Business Pundit website.

Disadvantages

• Covering those with pre-existing conditions and other individuals who lack insurance is, as the insurance companies have asserted, expensive -- Silerleib, Jackson and Nolen indicate the cost of the reform is $940 billion. Much of the money for the coverage will come from higher taxes, with more funding coming from cuts of arguably needed programs like Medicare. Business Pundit also claims that the increased coverages place further stress on primary care physicians -- more people will go to the doctor in theory, but the reform laws do not provide incentives that would attract physicians to general medicine instead of a specialty.