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How do Pre-existing Conditions Affect the Healthcare Industry?

, How do Pre-existing Conditions Affect the Healthcare Industry?

Pre-existing conditions have been a cornerstone of recent healthcare reform and debate in the United States. Insurance companies have long used pre-existing conditions (defined as a condition for which a patient has received treatment prior to enrolling in a health insurance plan) as a means to excluding patients from their plans or charging them significantly more for coverage. One of the key pieces of the Affordable Care Act (also known as Obamacare or the ACA), passed in 2010, states that insurance companies can no longer discriminate based upon pre-existing conditions. Once a person has insurance, in other words, health insurance companies must compensate for treatment, even with regard to a patient’s pre-existing condition. The previous justification for such discrimination was that, due to their pre-existing conditions, those particular consumers were more likely to utilize healthcare services and consequently they were more expensive for both employers and health insurance companies. This resulted in higher baseline insurance premiums for all consumers.

The Affordable Care Act, on the other hand, contains mandates that may make health insurance premiums more affordable, in addition to making healthcare services more accessible for a greater portion of the populations. The ACA mandates that small business owners with more than 50 full-time employees must provide some form of health insurance for their full-time staff or pay a substantial fine for each full-time staff member left uninsured. Individuals without health insurance coverage must also either obtain one of the public option health insurance packages or pay a penalty of $95 or 1% of their income (whichever is greater).

The Affordable Care Act has also produced the Small Business Health Options Program (SHOP) as a means for small business owners to directly compare different healthcare insurance packages for their workforces. All of these changes have been made to address the growing number of Americans without health insurance (some 50 million in 2013). Presently, costs for healthcare services rendered to the uninsured are absorbed by hospitals and health insurance companies in the form of higher prices for healthcare services and health insurance premiums. The ACA will in theory ease the burden on healthcare providers by ensuring that citizens are contributing a portion of their income toward their own healthcare, should they require medical attention.

There is one exception to the pre-existing condition mandate, however. Those individuals who have purchased grandfathered health insurance plans (private health insurance plans purchased in years past) may find that their insurance companies do not cover pre-existing conditions. If treatment is required for these conditions, citizens are advised to explore one of the public option packages that mandate compensation for treatment regardless of when the condition manifested.

pre-existing condition, Affordable Care Act, health insurance, small business owners

 

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