Pre-existing Condition is any illness or health condition for which you have received medical advice or treatment during the six months prior to obtaining health insurance. Group healthcare policies cover pre-existing conditions after you have been insured for six months, and individual policies cover pre-existing conditions after you have been insured for one year. Reference CIC Section 10198.7. Creditable coverage must be counted towards any pre-existing condition exclusion in either an individual or group policy.

Essentially, it is a medical condition, illness, or injury for which you just had treatment, are undergoing treatment, or have had treatment in the past. The context in which an insurance company will look at pre-existing conditions strongly depends on the type of insurance.

Individual and Family California health insurance.

This type of coverage is medically underwritten which means that you need to qualify based on health. Pre-existing conditions have the most impact here and it affects coverage in two ways.

First, you must qualify for coverage based on health so a carrier can increase your rates or decline/defer coverage altogether based on your pre-existing conditions. They typically have underwriting guidelines specifying how they may look at particular issues. Ultimately, the underwriter (person who decides to approve or decline health coverage) makes the final decision based on information found in the health application or medical records (if requested).

For some issues, the health insurance carrier may want a certain amount of time away from a give situation before offering coverage. A general rule of thumb is 6 months to one year for a more simple situation (simple broken bone, infection, etc). Some issues are deemed uninsurable for which they will not offer coverage ever.

If you are unable to qualify for individual - family health insurance in California, you can find options for the uninsured through the state program such as MRMIP. MRMIP is California state sponsored group plan which might cost more per month than traditional inividual and family health plan.

The second way pre-existing conditions can affect coverage for Individual Family California health insurance is after approval. If approved for coverage, there can be a waiting period for treatment (payment of) pre-existing conditions of up to 6 months if you did not have prior coverage or lapsed coverage for more than 62 days. Essentially, they will take into account time on a prior qualified plan (may be individual, small group, short term) towards a six month waiting period for pre-existing conditions.

Tier increase with Individual and Family coverage.

If a health insurance company does not decline coverage based on pre-existing conditions, they can increase rates. Tier 1 is the best rate and you can find this rate when you quote individual California health insurance. Tier 2 is typically 25% higher than this standard rate. Tier 3 is typically 50% higher and Tier 4 is typically 100% higher. Some heatlh insurance companies apply different increases. For example, Blue Shield of California has a Tier 5 which is much higher. This tier increase is not locked in stone and you may be able to have it removed or lowered in the future once time has passed from a given situation (assuming you are in otherwise, good health). We recommend submitting the required change of coverage form every 3-4 months until this tier increase can be decreased.

California Small group health insurance and Pre-existing conditions.

Pre-existing conditions are treated differently for Small Group in some important ways. HMO’s are typically not subject to waiting periods for pre-existing conditions. Maternity in California is typically not subject to waiting periods for either HMO or PPO plans. Otherwise, the six month waiting period is the same as individual plans. Always submit all claims through the carrier regardless and let them make the decision on waiting periods.

Small Groups do not have tiers, but by law, a health insurance company can go up or down 10% from the standard (Request Small Group California quote at www.getmymedical.com) rate based on the health of the group. This is called the RAF (Risk Adjustment Factor). A 1.0 RAF is the standard rate. 1.1 would be 10% higher and .90 would be 10% lower. The larger your group, the more likely you will have a lower RAF. Some carriers automatically give small groups the extra 10% increase as there are fewer people to spread the risk among.

Exclusions of certain conditions

California law prevents health insurance companies from excluding conditions a specific applicant may have (if a covered benefit) upon approval as other states allow. This is a mixed blessing. On one hand, a new enrollee does not need to worry about a condition re-occuring and having coverage declined during a period of time. The downside is that a person might be unable to qualify for coverage altogether which defeats the purpose of banning exclusions to begin with...The law of unintended consequences. Keep in mind that this exclusion is only dealing with a specific person’s pre-existing condition. Some plans will exclude certain coverages (i.e. maternity, brand name drugs) by design. A plan’s summary and explanation of benefits will list their standard exclusions.

It’s important to look at a heath insurance company policies and restrictions regarding pre-existing conditions, waiting periods and exclusions as they can differ from company to company.

For example, if you are being asked to choose between HMO and PPO, you have to know the difference between the two so that you can make an informed decision. Some employers partly paying for an employee’s insurance would sometimes give this choice.

HMO stands for Health Maintenance Organization. This is generally less expensive than PPO. If its network of hospitals and doctors are really good, it is recommended that you go with this. Under HMO, you will be required to choose an HMO physician. This healthcare worker will be the one coordinating your medical care. His or her duty includes referring you to specialists in the same HMO network. If you chose to seek treatment from a doctor outside the network, you will have to shoulder the cost yourself most of the time.

PPO on the other hand stands for Preferred Provider and is more flexible than HMO. They are both the same though in the sense that it has a list of healthcare workers in a network. The difference
though is that when you seek treatment from a doctor not a member of the network, you will only pay for the difference between the charge of said doctor and a doctor within the network thus reducing the amount you have to pay out of your own pocket.

HMO plans are generally less expensive but PPO health insurance plans are more flexible. This could make choosing one between the two a bit hard. Fortunately, there are companies offering individual health insurance which combines features of these two although you will have to live with some of the things that will not be added to the whole policy.

Choosing between HMO and PPO is not really a hard task once you understand what these two are all about. By knowing what each entails, you will be able to gauge what will work best for you in the future. You can also base your choice on your budget and what you think you will need in the future. Sometimes, it is better to stay conservative and pay only for what you will surely need especially if you are on a tight budget. But if you can afford it, there is no harm in preparing well for the future.

Health problems are common and it is best to be prepared for it. With a good health insurance in place, you can rest easy knowing that you are covered. This is especially true after you retire. This is why you spend a lot in paying for a good policy of course. To make sure that by the time you retire, you do not have to worry about paying for medical bills.