Private Insurance & Preexisting Conditions

For millions of Americans, getting private insurance can be impossible due to what the health insurance industry calls "preexisting conditions." Whether as mild as acne or as serious as heart disease, preexisting conditions represent expensive medical and prescription drug claims for insurers, who charge exorbitant premiums or refuse coverage altogether for those who have these conditions and need individual health insurance policies.

Private Insurance

• Private health insurance is an insurance policy written for an individual, or a single family, that doesn't have access to health insurance coverage through a group plan, such as one offered through an employer. Private insurance is often the only option for the self-employed, unemployed, students who are no longer dependent children and others who cannot count on coverage through a spouse or family member's group health insurance plan.

Preexisting Conditions

• One of the most frustrating aspects about purchasing individual health insurance policies is attempting to predict whether you have what's considered a "preexisting condition." What qualifies as a preexisting condition can differ from insurer to insurer and can include conditions you haven't been treated for in several years but that you suffered from in the past, such as cancer that has gone into remission.

  A good example of the nebulousness of the term "preexisting" condition can be found on Good Neighbor Insurance's website: "Technically, any medical condition that you have had prior to your application for health insurance...can be considered a preexisting condition. If you have been to a doctor about a sore elbow, even though it was four years ago and even though you received no treatment whatsoever, an insurance company could consider that a preexisting condition."

Coverage

• A preexisting condition, regardless of how seemingly minor or how long ago, is often enough to block access to private health insurance. The Kaiser Family Foundation (KFF) found in 2001 that an array of preexisting conditions could result in an inability to get private insurance. Conditions ranging from depression, hay fever and an old knee injury to AIDS, breast cancer in remission and high blood pressure resulted in coverage being denied. When coverage was offered, KFF found, it often came with restrictions on benefits for the preexisting conditions or limited prescription drug coverage.

Cost

• The cost of private insurance for those who are deemed to have preexisting conditions often makes coverage unaffordable. The Kaiser Family Foundation study found that premiums for those with preexisting conditions were often more than $2,000 per year, as of October 2010, but could reach an astounding $30,000 per year. When restricted coverage for the preexisting conditions and limits on prescription drug coverage are figured in, the cost for private insurance for those with preexisting conditions become enormous.

Considerations

• The Kaiser Family Foundation study on access to private insurance for those with health conditions found what those individuals with these conditions who had attempted to purchase individual policies have known for sometime: Coverage is denied to people with preexisting conditions, and when it's offered, is less than useful or prohibitively expensive. "If you're already sick or low-income, the individual market is unlikely to be an answer for you," says Drew E. Altman, Ph.D., Kaiser Family Foundation president and CEO.