Diary

Pre-Existing Condition Exclusions ARE ALREADY prohibited

One of the really frustrating features of the ongoing healthcare debate is that people who are supposed to know what they are talking about obviously don’t.  One of the issues on which the majority of commenters appear to be clueless is the Pre-existing condition exclusion.  While this is a problem, it is not nearly the problem that people think it is.  First, the majority of people who have insurance have employer provided insurance.  If their insurance is provided by an employer, then it is regulated by the Employee Income Retirement Security Act (ERISA).  Second, under ERISA, for the most part, insurance companies cannot deny coverage because of pre-existing conditions.  There is a long complex provision which is set forth in full on my Web site, which limits the situation in which insurance companies can refuse to cover employees or illnesses.  The short summary is that if you had insurance before, then the insurance company cannot refuse to cover you.  It really works.  You can switch jobs and not lose coverage.  That is, you will be covered by your new employer’s policy.  The requirement of prior insurance does cut out people who wait until they are sick to buy coverage, while still allowing people who just want to switch coverage or switch carriers to switch.  It has been in place for about 20 years.  The approach of forbidding insurance companies from denying coverage if there has been prior coverage would work for individual polices as well, because the problem is that you do not want to encourage people to go bare until they are sick.