Individual Health Insurance – Understanding Pre-Existing Conditions

Premiums for individual health insurance in Texas can be higher and overall coverage limited by pre-existing conditions. When a person applies for a policy, insurers interview the candidate to asses her current overall health status as well as conditions or treatments for which she has sought treatment in the past, such as depression, fibromyalgia or diabetes. The insurer may opt to offer a policy with an elimination rider to exclude coverage for certain pre-existing conditions for up to 24 months, sometimes longer.

When a person with individual health insurance in Texas submits a claim, the insurer may investigate whether she has sought treatment for the same condition within the past five years. Even if no such pre-existing condition was discovered before the policy was issued, the insurer can deny coverage of the claim or even take steps to declare the coverage null and void. HIPAA – the Health Insurance Portability and Accountability Act – was passed in 1996 to protect people and their families from losing coverage when they change or lose their jobs and limits the use of pre-existing condition restrictions by insurers. Under HIPAA, maternity benefits cannot be denied.

Only those illnesses and conditions that are actually present in a policy holder’s current health or health history is subject to pre-existing condition limits. Genetic information cannot be used to deny coverage or charge higher premiums for individual health insurance in Texas as it is only an indication of a person’s predisposition to certain illnesses and is not evidence of those conditions being present. Pre-existing condition riders are not allowed by law at HMOs in Texas. Per HIPAA, pre-existing conditions will not apply if the policy holder has had some form of continuous group coverage for at least 18 months with no gaps longer than 63 days.

Health insurance policies have guaranteed renewability, meaning they cannot be canceled, so long as the holder pays the premiums and adheres to all other premium guidelines, including any residency requirements. So-called temporary health insurance policies that provide coverage for a limited short period of time (i.e. six months) are not guaranteed renewable. The most cost-effective option for a person seeking individual health insurance in Texas is by joining a group health plan through an employer due to federal requirements related to your employer paying a larger portion of the employees’ premium.

These group plans do become costly when an employee adds dependents to the policy as there are no mandates requiring you employer to pay any portion of their premium. Also church, union or association, such as a Chamber of Commerce or other professional organization may also offer coverage, generally at a higher rate than individual policies. Individual health policies are generally far less expensive than group plans due to federal requirements on group plans related to guaranteed issues provisions and other federal mandates.

Overall, if you have major health conditions it is advised to get coverage from your employer as group policies require guaranteed issue. But if you are free of major health conditions you can get an individual health insurance in Texas policy at a much lower rate in most cases.

About the author: Charles Peeler has been providing Individual Health Insurance in Texas since 1993. For more information or to acquire a quote he recommends this Texas Health Insurance site.

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