Coverage for Pre-Existing Condition
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Introduction
Simple denial of coverage is an obvious method insurance companies use to restrict coverage to people who present with pre-existing conditions. Another method involves offering unaffordable policies most U.S. citizens dislike. Other ways include asking for enormous upfront premiums, refusing drug coverage offers, regarding a doctor’s visits, extracting large deductibles in the policy, and discriminating against people whose lifestyle or age render them likely to demand compensation. People with pre-existing medical conditions reserve the right to acquire cover with an insurance company of their choice. Consequently, the law requiring all insurance companies to provide coverage to all United States nationals without discrimination is fair.
Coverage for Pre-Existing Condition
A pre-existing medical condition is a disorder present prior to the application of health insurance cover by an individual. Most United States citizens with pre-existing medical condition used to be denied insurance cover or were covered but at rates, they could not afford, rendering them uninsured. This was the case especially for people whose conditions are serious. Such serious conditions include HIV/AIDS, cancer, multiple sclerosis, and diabetes type II. Life insurance, just like other types of insurances, has to depend on risk. Consequently, the insurance companies used to penalize clients with pre-existing conditions because they usually present a higher risk than normal individuals do. Those with pre-existing conditions that are accepted, however, are forced to consent to riders prior to the start of the coverage. Riders unfairly exempt the insurer from covering the cost of treatments associated with such condition for 6 to 18 months. On the other hand, young, healthy applicants who pose little risk got the most attractive, comprehensive, and affordable schemes.
People from diverse racial and ethnic origins in the United States may present with pre-existing disorders. These could lead to the denials described previously. The Alaska natives and American Indians stand a higher chance of facing the denial because more than a quarter of their population is affected by such conditions. For the Hispanics, around 24.3 per cent have one or more conditions. Slightly less than 2 in 5 of Hawaiians and the rest of the Pacific Islanders might face denial of cover because they present with one or more pre-existing conditions (Jaff, 2005).
Close to 58 million U.S., citizens of less than 65 years are denied insurance cover due to a pre-existing condition. In the absence of health reform, 22.5 percent, an equivalent of 1 in every 5 of the citizens is at risk of coverage denial. Older citizens are more likely to present with a pre-existing disorder. Statistics obtained a few months before the passage of health reform laws indicate that approximately 1 in 5 of young men and women, an equivalent of 15 per cent of the youth have a pre-existing condition likely to lead to coverage denial. For adults between the ages of 45 to 55, 34.5 percent could be denied cover. The adults account for a staggering 27 per cent of the United States non-elderly population. Nevertheless, they represent over a quarter of individuals with one or more pre-existing conditions.
Providers of medical insurance refuse to post the prices they charge anywhere, or if they do, they post them at places not accessible conveniently to the clients. The reason behind this is the fact that they do not charge uniform prices to their clients. Individuals with Medicare or Medicaid cover and those without do not pay at the same rates. Additionally, charges imposed for treatment and cover may vary immensely in a state (Green, 2012).
The rate of coverage denials due to a pre-existing condition is staggering. A 2011 Energy and Commerce House Committee report established that the largest American health insurance companies have been declining more and more applications for coverage recently. Indeed, from the year 2008 to 2010, over 550,000 United States citizens faced coverage denials. By the year 2010, the committee found that 1 in 8 people were denied coverage (Rosamond, 2012).
Most insurance companies in the United States have employed experts in medical underwriting. The experts scrutinize the medical records of an applicant in an attempt to determine the level of occurrence of the risk. They look at the age, BMI, lifestyle, as well as hospital records of the prospective insured. They may choose to reject or set extremely high premiums for people who suffer pre-existing conditions. This is done solely to account for any loss the insurance company may part within claims. Those who support medical underwriting suggest that it may thwart biased selection or the act of waiting for a sickness to set in before getting insurance. However, the government has argued that the practice has seen soaring numbers of uninsured United States Citizens (Stone, 2008).
Options under Consideration
There are various options under consideration. For children, legislative policies already have it that for coverage issued after September, insurance companies cannot deny coverage based on a preexisting condition. For the rest of the population, the law will be effective from January 2014. A transition mechanism to the new requirements has been put in place. There is the Pre-existing Condition Insurance Plan (PCIP). Nonetheless, the program has not been going as efficiently as the Obama administration had expected. Barely a week after the passing of the legislation, many insurance companies declared they would not sell new child insurance policies, citing the high risk associated with the new requirements.
The intention of the government of the United States has been to create as many options as possible for people with pre-existing conditions to acquire comprehensive insurance coverage. Such people will have to choose from private insurance, Medicare, Medicaid, employer-based insurance scheme; state based exchange, or federally administered policies. The insurance exchanges target individuals and small enterprises that want to get insurance cover for their employees with pre-existing conditions. Individuals and families whose incomes are in the range of 133 to 400 percent of the federal guideline of poverty are eligible to enroll in the scheme. Cost sharing credits and affordable premiums will be made available to the category of people. Businesses requiring to insure over 50 employees that have pre-existing conditions will also qualify, but will have their tax rates cut significantly to enable them afford the service for their workforce.
The government has also recommended enrollment into the consumer operated and oriented plan. Since it will offer consumer friendly rates, the government is encouraging individuals with pre-existing conditions to seek the option, even though the scheme may require them to pay slightly high premiums. However, it is an extremely attractive alternative for hundreds of thousands of U.S. citizens with pre-existing conditions who might refuse to enroll in state schemes for unknown reasons.
The Department of Health and Human Services, through its secretary Kathleen Sebelius, has since sent a letter to the National Insurance Commission. The letter outlined steps the department believed could help protect options for children insurance coverage, regardless of the health status of such children. Among the steps were the creations of periods of open enrollment during which people can buy coverage for their children, who fail to access employer-based schemes. The department further noted an agreement Maryland Insurance Administration on one side made with CareFirst BlueCross BlueShield and Kaiser Permanente of the Mid-Atlantic States on the other. The agreement supported the ObamaCare policies and started executing them with immediate effect. By October, they were already issuing policies in the scheme of child-only without any restrictions. They considered the implementation of the scheme before the government deadline an offer to their clients. HHS reiterated its commitment to encourage insurers to offer the policy of child-only continually. This, the department said, was likely to include coming up with federal regulation requiring the creation of a countrywide limit on the enrollment period of insurance. This would shield parents from having to wait for their children to fall sick so that they can purchase insurance coverage.
A Review of the Literature
A large estimate of the proportion of U.S. citizens has health issues that render them susceptible to denial of health insurance provision. The reason is that insurance companies have compiled a variety of lists of medical conditions likely to raise a red flag. At the same time, medical underwriters may take an extremely conservative way and choose to become very expensive with a long list or opt for a short one.
A number of surveys on the incidence of pre-existing conditions have been conducted. At the lowest limit, 8 conditions were counted. These included cancer, heart disease, stroke, and diabetes type II. The study identified approximately 37 million U.S. citizens whose ages ranged between 18 and 65 who lived with one or more of these medical issues. In a similar survey, a list of over 60 medical conditions was used. The study arrived at a figure of 50 million U.S. citizens who were extremely susceptible to coverage denial. When the Government Accountability Office (GAO) later used the data from medical studies, it ended up with an estimate of over 122 million people. When represented in percentages that can translate into an estimate of more than 21 percent of the United States adults who are at potential risk. This is an equivalent of 67 per cent, and a midpoint lying at 34 per cent. The Department of Health and Human Services of the United States did an analysis that got a range of 20 to 48 per cent a figure quite close to that got by GAO (Doreen, 2013).
One popular think tank called Heritage Foundation suggests projections concerning the scope of the problem are likely to miss the mark. The United States federal government expected approximately 375,000 citizens to enroll in the Pre-existing Condition Insurance Plan (PCIP), a special cover for people who have not been covered. Nevertheless, as of February 2013, only 107,000 citizens had registered. With that in mind, there was apparently a myriad of factors influencing enrollment into insurance cover (Taranto, 2013).
The principal caveat with most of the surveys is their estimates of the proportion of the U.S. citizens living with health issues likely to cause coverage denial. This describes only group of individuals who are considered to be at most risk. What misses are estimates of the proportion of U.S. citizens whose coverage is denied. One analysis from the Committee of Energy and Commerce of the Congress used data derived from the country’s four largest insurance companies. The companies included the Humana, WellPoint, Aetna, and the UnitedHealth Group. The investigators established that the insurance companies often denied insurance coverage to the sizeable proportion of the U.S. citizens that suffered from pre-existing conditions. Indeed, 1 out of 6 Americans had failed to secure coverage because of having such pre-existing conditions in the four-year scope the survey covered. The rate of coverage denial increased every year, rising by approximately 53 per cent over the four years. Simultaneously, there was a soar in the figure of new coverage applications (House Committee on Energy and Commerce, 2013).
The House Committee report added that executives operating insurance companies were considering extra measures meant to treat people with pre-existing conditions unfairly. According to the documents of internal corporate affairs the committee accessed from companies in question, several measures were set to be instituted. These included the linkage of extra claims to exclusions of a preexisting condition, withholding compensation for prescription medications associated with a preexisting condition, and narrowing the scope of insurance coverage that was considered credible prior to the passage of the Affordable Care Act (ACA). Once President Obama pended his signature on the bill on March, the health system reformed, and a preexisting condition would no longer be used as the basis for denial of insurance claims or coverage.
In yet another survey conducted by the Family of Kaiser Foundation, data on monthly polls were tracked. As of July 2013, the foundation reported that over 50 per cent of the U.S. adults claimed that either themselves or a member of their family suffered from a cardiovascular disease, cancer, or diabetes type II. Many other conditions known to trigger issues with insurers were not included in the study. In the study, either around a quarter of the participants said insurance coverage had been denied totally or unaffordable premiums charged due to the pre-existing condition (Kaiser Family Foundation, 2012).
The investigation is far from fitting perfectly with studies along the same line. To say a person from one’s nuclear family suffers from a certain condition, in essence, is household level reporting. The surveys of the GAO estimated the proportions of the individual people. On analyzing the statistics carefully, 10 per cent of individual households had apparently run into problems with their insurance company. From the foregoing, the survey by Kaiser Foundation affirms strongly that coverage denial problem is rife and substantive. Nevertheless, it is not necessarily great as the estimates in the studies indicate.
In a study using case studies, an insurer denied the claim of a hospital based on policy language. In the terms and conditions, language had been used in a way that cleverly excluded coverage for any pre-existing condition. The participant patient produced a copy of the policy upon request. It was established that a pre-existing condition had been described as "any condition for which treatment had been sought before the date the coverage was applied." The first stage of Appeal Solution on a claim denial is the verification of the precise words the clause on pre-existing has used.
Upon a thorough review of the medical records of the patient prior to her hospitalization, it became clear that a doctor had seen her a few days prior to the date the coverage was effected. That was, of course, to be a red flag to any medical underwriter. The doctor’s records were retrieved with the informed consent of the cover applicant. According to the records, the doctor who saw the patient first was not able to clinch a conclusive impression and referred her to a medical specialist. The coverage was deemed to have become effective immediately the initial consultation was sought, even before the specialist could make a conclusive diagnosis.
Legal investigations in a similar case shed light into a decision that favored an insurance company's appeal. The Supreme Court in Texas, in Aetna Life Insurance Company versus Scarborough ruled that health care encompassed any necessary preliminary examinations. Nonetheless, for a pre-existing condition exclusion to become applicable, it is mandatory for the covered person to receive such service for known conditions. The patient's treatment, under the circumstances, had been done before the effective date of the policy. It belonged to the category of unknown conditions. Such treatment rendered before the effective date of the policy is considered given for a condition other than those which are stated in the policy agreement. It is not brought under the scope of the pre-existing condition as the policy defines (Taranto, 2013).
Conclusion and Recommendations
Insurance companies should provide coverage to those who have pre-existing medical conditions. Though one would deny this at first perception, people enroll in insurance schemes anticipating they will fall sick at one time or the other. People with pre-existing medical conditions are more likely to be interested in covering themselves compared to normal people. In fact, the very conditions insurance companies deny coverage are the ones that make individuals who have them seek the cover. The stated such individuals are ready to pay higher premiums than other people are in order to have themselves covered. However, I consider even charging them higher premiums than normal discriminatory, and it should not happen.
Though understandable that insurance companies are in business and must make profits, they should not go to the extent of desiring to over-exploit their clients or deny others coverage. One does not need to be an expert in the operations of the principles of insurance to figure out that many insured people pool their resources together. In a case where one of them is affected by a risk covered in his or her policy terms, the rest come together to save the situation. This same principle should apply in the case of pre-existing conditions. An individual with a pre-existing condition should have the right of ‘inviting’ others to pool their resources together in order to save him or her out of the situation in which he or she finds him or herself.
From a humanitarian point of view, a person should not be discriminated on any pre-existing medical conditions from which he or she is suffering, unless such a condition is self-inflicted. It pains that the United States citizens with pre-existing conditions have continued to struggle for years on end to search for health insurance schemes that would cover them unconditionally. At times, even their employees failed to provide insurance cover for their much-needed care. This often leaves them extremely vulnerable and unable to access affordable treatments, medications or other medical procedures they need. It is extremely worrying that such discrimination probably leads to pain, further sickness, debilitation, and sometimes ultimately cause death.