What Does Health Insurance not Cover?

You do not want to wait until you are sick or injured to find out what your health insurance policy will not cover. Read the policy carefully. “Exclusions” (also called “Impairment Riders”) are certain injuries, conditions, or procedures for which an insurance policy will not pay any benefits. Possible exclusions include: pre-existing conditions; suicide or other self-caused injury; sexually-transmitted disease; vision correction; noncommercial airline travel; experimental treatments (ask how they are defined); and injuries from war. “Cosmetic Surgery” that is needed because of an injury or congenital defect is usually covered, but covered elective cosmetic surgery generally is excluded.
One of the most common exclusions is for pre-existing conditions. A “Pre-Existing Condition” is a medical condition or injury that was diagnosed or treated prior to the start of the health insurance policy. A policy with an exclusion for pre-existing conditions does not pay for expenses related to pre-existing conditions. Generally, this exclusion lasts for a limited “Waiting Period” after you start your policy.

Pregnancy is not considered a pre-existing condition. Also, health care costs for newborns and adopted children covered within 30 days should not be excluded during a waiting period. Further, employers in interstate commerce with 15 or more employees must provide the same benefits for pregnancy, childbirth, and related medical conditions as for any sickness or injury. For plans offered by other size employers, you should check whether normal pregnancy and childbirth are covered — not just complications.

Waiting periods for pre-existing conditions are intended to discourage people from only signing up for health insurance when they know they will need something expensive in the near future. Unfortunately, waiting periods can also leave people without coverage for chronic conditions when they switch employers. To address this, the “Health Insurance Portability and Accountability Act of 1996” (HIPAA) helps people avoid duplicative waiting periods for pre-existing conditions when they switch form one insured employer to another.

HIPAA says that employees can switch employers without losing group health insurance or having a new waiting period for pre-existing conditions. Insurers cannot exclude pre-existing conditions with a waiting period longer than 12 months. Also, prior continuous coverage (without a gap of more than 62 days) must be credited toward this 12 months. For example, if you had continuous coverage for 5 months before switching employers, then your new health plan cannot impose on you a waiting period for pre-existing conditions longer than 12-5=7 months. If you had coverage for 12 months before switching employers, then your new health plan cannot impose any waiting period on you. If you are switching employers, then get a “Certificate of Credible Coverage” from your prior health plan to ensure credit for past coverage.

HIPPA also mandates the following. Insurers who serve employer groups with 2-50 employees must offer insurance coverage to all such groups. Insurers must cover inpatient coverage for mother and infant for at least 48 hours after a normal birth or 96 hours after a cesarean section. The tax deductibility of health insurance premiums for the self-employed was increased. Long term care insurance premiums are now tax exempt like those of regular health insurance. HIPAA also created a federal pilot program for Medical Savings Accounts that we will discuss later.

A “Rider” is a separate page attached to a standard policy that documents: coverage for a condition that generally would not be covered by a standard policy; or exclusion of a specific condition that generally would be covered by a standard policy. An “Endorsement” is similar to a rider, but is included in the body of the policy.