Pre-existing conditions are one of the most confusing and frequently asked about elements of a health insurance plan. What exactly is a pre-existing condition? Why do insurers not generally cover them? And how can you receive coverage for pre-existing conditions? These are some of the questions we will answer here.
Approximately 50% of people looking to buy medical insurance have some form of pre-existing condition. These conditions can range from minor ailments that won’t affect your day to day activities, to serious conditions such as heart problems or type II diabetes, for which treatment will be needed throughout your life.
Over the last 20 years the number of people seeking coverage for pre-existing conditions has increased rapidly. People are typically leading a more sedentary life today than in years previous, resulting in illnesses associated with peoples diet, lack of exercise and lifestyle in general. Furthermore, medical treatments have improved to the point where illnesses that once could have killed people are now perfectly treatable and survivable, but result in more people existing with these medical conditions that are classed as ‘pre-existing’ when they try and purchase medical insurance.
For those of you looking to purchase a new health insurance plan, obtaining coverage for pre-existing conditions is an important issue. Fortunately, with improvements to the health insurance industry, and medical advancements, an increasing number of insurers are willing to take on clients with pre-existing conditions.
What Are Pre-Existing Conditions?
A pre-existing condition is an illness or injury that you have, have had treated, or have displayed symptoms of (whether you know it or not) before applying for a health insurance plan. These conditions can range from torn ligaments to chronic respiratory problems to hereditary diseases like diabetes. Pre-existing conditions cause problems for insurers and yourself as a client alike in that insurers traditionally do not want to cover them, and clients want them covered more than any other conditions. This should be obvious from both sides, as clients know they will need treatment for pre-existing conditions, and insurers know they will have to pay out for treatments before taking the client on (there is no risk for them as they are guaranteed to have to pay for treatment).
What Are an Insurer’s Options When Taking on a New Client With a Pre-Existing Condition?
Before signing up, you will firstly be evaluated through the insurer looking at your medical records, and possibly making you undergo health tests to assess your overall condition. Once they have come to a satisfactory evaluation, an insurer is left with 5 options. They can either:
Provide you with coverage as normal, including your pre-existing conditions, without any exclusions or premium loading (this may be the case if your pre-existing condition is something minor).
Provide you with coverage including your pre-existing conditions but with premium loading (see below for more information on premium loading).
Provide you with cover for your pre-existing conditions after a moratorium period (see below for more information on moratoriums).
Provide you with limited insurance coverage, excluding any pre-existing conditions (exclusion plans).
Decline your case entirely. (Note that this is very rare and would only occur if you, for example, had many illnesses or pre-existing conditions that would be expensive for the insurer to cover).
Insurers traditionally opted to exclude coverage for pre-existing conditions because it is virtually guaranteed that they would have to pay out for treatments if they did accept them under normal coverage. The insurance industry is based on risk. When you buy medical insurance, you transfer the risk of having to pay for any injury or illness from one party (yourself) to another party (your insurer) in exchange for a pre-determined fee (your premium.)
For an insurer, there is no risk in covering pre-existing conditions, because they know for a fact that they will have to cover some treatment for them. They therefore traditionally choose not to cover the costs of this treatment. This is known as an exclusion plan as you are eligible for full insurance coverage excluding your pre-existing condition(s). Furthermore, any conditions or medical treatment you may need as a result of a pre-existing condition will be excluded (e.g. if you have chronic asthma as a pre-existing condition, any treatment related to your asthma will be excluded from coverage as well).
The older you are, the more likely you are to encounter lifestyle illnesses and other chronic conditions, so it is important to obtain health insurance before these occur. If you wait until you have a serious condition before getting health insurance, you may not receive full coverage for your condition. However, attitudes in the insurance industry are beginning to change.
With the increase in people searching for plans that include pre-existing conditions, we have recently seen a change in policy by insurers. There are more insurers willing to cover some pre-existing conditions, particularly the more common ones such as hypertension, high cholesterol, asthma, and skin cancer (BCC). The conditions that insurers will cover is broadening as are the number of insurers willing to cover them (in order to remain competitive).
Furthermore, some quality insurers will offer differing extents of coverage for more serious pre-existing conditions such as cancer, heart attacks, and diabetes. The amount of coverage you will receive, and whether you’ll receive coverage at all, depends on your individual case. You will be assessed by an insurer a significant amount of time after your condition’s last episode (e.g. 5 years after your last bout of cancer surfaced) and they will determine whether your health and lifestyle lends to them covering your pre-existing condition or not. Conditions such as type-II diabetes are now often covered, particularly for those who developed the conditions later in life, as there is a low risk of high costs for insurers.
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How Pre-Existing Conditions Can Be Covered
Insurers will treat each case of pre-existing conditions differently. Trying to pick an insurer can therefore be overwhelming and confusing, but now China Health Insurance can help you to find coverage for your pre-existing conditions. There are several ways of incorporating pre-existing conditions on your plan.
Firstly, you are more likely to get coverage from a high quality insurer that you can continue your cover with long-term. This will come at the cost of a higher premium, but will ensure you’re covered for all your potential costly treatments. Known as premium loading, the added fees can range from increasing your annual premium by a small % to adding expensive fees to your monthly premiums depending on what the risk is of covering your condition.
A second way of covering pre-existing conditions is through an MHD policy (Medical History Disregarded). These policies are group health insurance plans, and so work differently from individual plans. An insurer will cover all your individual pre-existing conditions, as the risk to the insurer of covering your individual condition is outweighed by the overall group size and the premium costs of a large group. To set up an MHD policy, you need a corporate health insurance plan. It is recommended that you get some specialist advice before doing this, and we can help. Contact us to talk about your options.
Finally, you may be offered a plan that includes a moratorium period. A moratorium is a pre-determined amount of time that an insurance company will not cover your pre-existing condition for. If you go through the moratorium period without receiving treatment for your pre-existing condition at all, then the insurer will cover the condition from that point onwards. These periods are typically 2 years long, although the length can differ between insurers, and on a case by case basis.
Changing insurers if you have pre-existing conditions is generally not advised, unless you have done in depth analysis of the benefits of switching to a new insurer vs potentially losing out on coverage for your pre-existing condition. Reasons to change insurer can include; if your premiums are rising too steeply, and if your benefits are being reduced.
Let us help
We understand that it can be hard to find the right plan that will cover your pre-existing conditions to the extent you want at the price you want. Finding the perfect insurer and plan can be tricky, so speak with one of our experts, and we can help you. We typically gather options from several insurers to find the best proposed plan for your individual needs and requirements. We have contacts with over 60 international medical insurers, and as the largest International Private Medical Insurance intermediary we are well equipped to help you find the best plan possible. Either fill in our quote form at the top of this page, or contact one of our experts to get started today.