CHOOSING AN INSURANCE PLAN - COVERAGE OF PRE-EXISTING CONDITIONS

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OPTIONS FOR COVERAGE OF PRE-EXISTING CONDITIONS

Often a major question is, “Will my pre-existing condition be covered?” Insurance companies handle this in basically four ways:

  1. If the pre-existing condition is considered too large a risk, the company will decline to offer coverage.
  2. One company we work with will cover acceptable pre-existing conditions, but with rate-ups of 20 to 40 percent. Coverage on their plan for a single male in his late twenties with a $1000 deductible would be $131 a month. A 20 percent rate-up would put the premium at $157 a month. The advantage here is that the pre-existing condition will be covered in full.
  3. Some companies put a permanent rider on the condition. The monthly premium for a $1000 deductible on this plan for a single male in his late twenties would be $50.40 a month.
  4. Another option would be to put a two- or three-year rider on the pre-existing condition. This means that the insurance company will not cover the pre-existing condition for the first three years of the policy. The annual premium for such a plan would be $901 ($75 a month) if paid up-front.
  5. Finally, some plans say they will cover no pre-existing condition for the first 24 months of coverage; and then after that, cap coverage for pre-existing conditions at $5000 per year. The annual premium for plans like this for a single man in his late twenties with a $1000 deductible would be $868 ($72 a month) if paid up-front.