Tenzing pacific services

Health Insurance for
Pre-Existing Conditions

Pre-existing conditions are health problems apparent before the date your coverage starts. Unfortunately, pre-existing conditions are a big part of life, and an even bigger aspect of your health insurance throughout Southeast Asia. Without the right plan, you could be paying out-of-pocket for medical expenses associated with pre-existing conditions.

Below is an explanation of how pre-existing conditions can affect your health insurance.

Health Insurance for Pre-existing conditions

Avoiding Stress Due to Pre-Existing Conditions

1. Get health insurance before you need it. Getting health insurance when you are healthy may seem counterintuitive, but insurance is all about covering future unknown medical conditions, accidents and treatments. Seeking health insurance for pre-existing conditions after an accident or diagnosis is equivalent to asking for car insurance after you’ve been in a crash.

2. Stay insured, preferably with the same safe, long-term insurer. If you have gaps in insurance or frequently switch providers, you run the risk of having your policy affected by a pre-existing condition. Starting a new policy increases the likelihood of claims being denied due to pre-existing conditions. Limiting the number of times you’re starting a policy from scratch therefore lowers your risk.

Health Insurance for Pre-existing conditions

How Providers Handle Pre-Existing Conditions When Applying

To gain coverage for pre-existing conditions from the inception of the policy, you’ll need to declare that condition on the application. This will go to the underwriting department, who may request supporting medical documents. They will then offer one or more of the following options:

1. Accept the condition with no special terms. Insurers choose this option when the condition is not very serious and doesn’t have a high likelihood of future claims.

2. Accept the condition with a premium loading.  Insurers will sometimes agree to accept the risk of a condition and chance future claims if you agree to pay more on your annual premium.  For example, an additional 20% (“loading”) will be placed on your premium to cover a particular condition.

3. Exclude the condition.   If the condition is too risky to cover, the insurer will exclude coverage for the condition from your policy. Moreover, exclusions will apply if the insurer requests supporting medical documents that you’re not able to provide.

4.Reject your application.  If you fall outside of a provider’s risk tolerance, the insurer will reject your application and not offer you a policy, even with exclusions.

Providers handle pre-existing conditions differently – some insurers will not accept anything, while others will be more aggressive.  This is dependent on the terms of the policy, and how the insurer completes their underwriting.  Speaking to a Tenzing agent can help clarify which providers are more helpful with pre-existing conditions.

Pre-existing conditions can also be handled through group policies. A Medical Health Disregarded (MHD) plan will cover all pre-existing conditions for companies as small as five employees, although most modern international providers will require at least  10 employees.  Most local providers allow MHD at 50+ lives.

Health Insurance Tip

Ask your potential employer to see the details when negotiating a contract. Many expats living in Southeast Asia are given inadequate plans as part of their employee benefits package, which can lure you into a false sense of security. Ask to see the provider and benefit details. If you’re not satisfied, try to negotiate a stipend for coverage you find suitable.

Learn more about Employee Benefits in our blog.

Which Pre-Existing Conditions can be Covered? Which are Excluded?

Each provider has a different level of risk they’ll accept, meaning they each address pre-existing conditions differently.  However, there is an overall theme for most insurance providers in terms of pre-existing conditions:

Often considered: Most providers consider minor conditions, non-recurring conditions, injuries from the past, injuries that don’t fall on major joints, and conditions with smaller medical bills. Examples include asthma or an acute injury in a non-joint fracture from your past.

Accepted by some: Some insurers accept chronic conditions that are easily managed with medication and healthy lifestyle changes, such as hypertension and acid reflux.

Usually excluded:  Diabetes or other chronic conditions that can lead to a variety of health problems, recent injuries or diagnoses, and conditions that require ongoing treatments are usually excluded.

Always excluded: Some pre-existing conditions are always excluded, regardless of provider. Examples include costs for immediate treatments or surgeries, serious chronic conditions, cancers, and treatments that are not medically required, such as cosmetic surgeries.

Remember, the point of insurance is to cover you for future unknowns. If a provider knows they’ll have guaranteed losses throughout the future, then they will take measure to limit their liability: exclusion, premium loading or rejection.

If you have an exclusion as part of your health insurance policy, then the exclusion will apply to your condition AND related treatments to that condition. If your primary condition leads to other issues, then the new complications will also be excluded.  There is a lot of grey area in what is caused by a pre-existing condition, so it is up to the insurer’s discretion – this proves the importance of purchasing health insurance when you’re healthy.

 

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How Providers Handle Pre-Existing Conditions at Renewal

Far too frequently, a buyer only looks at the upfront price and overlooks the renewal, especially after high or serious claims. This is the true test of a good health insurance provider:

  1. How do they handle large claims for serious accidents?
  2. How do they handle serious diagnosis?
  3. How do they treat you at the renewal date if #1 or #2 happens?

Most local health insurance providers in Southeast Asia operate on an experience-rating basis, meaning your renewal offer will be based on your claims experience.  If you have high claims, you should expect high premium increases.  Some experience rated policies don’t have guaranteed renewal, so your high claims might cause you to lose coverage entirely. Other approaches include:

  • Set a maximum benefit payable for your condition
  • Impose co-pays
  • Require deductibles

Community rated policies, on the other hand, offer renewal terms based on the claims experience of everyone in the plan, which spreads out the risk.  These policies have a fixed annual increase regardless of how much you do or do not claim.  The increase is usually 5-10% per year, which is based on medical inflation and the ratio of claims in their portfolio.  These increases can be offset with:

Community rated providers are significantly more stable over the long term as they only increase your rate by the same fixed rate rather than kicking you off the plan, or implementing other liability control methods.  Both styles of rating have a place in the market and are suitable for different people with different profiles, budgets and risk appetites.

 

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Transferring Policies With Pre-Existing Conditions

If you have pre-existing conditions that you want covered continuously, a few insurers offer a Continuing Personal Medical Exclusions (CPME)  policy. With CPME applications, a new provider will agree to accept your policy under the same terms as your previous insurer, as long as you meet the following requirements:

  • No break in coverage
  • Applying to a similar level of benefit
  • Provide a certificate of insurance
  • Have a copy of full medical questionnaire from previous insurer

Unfortunately, very few providers offer CPME policies.

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What’s the Best Health Insurance for Pre-Existing Conditions?

The only way to obtain an official offer of insurance is by applying and providing further medical information or medical reports requested by the insurer. S peaking to an insurance broker can help you find the optimal provider without having to research each insurer’s policies.  Typically, the following health insurance providers handle pre-existing conditions well:

  • Aetna
  • Allianz
  • Cigna
  • IPH
  • PassportCard
  • April
  • Swiss Global
  • IntegraGlobal

These are strong options, but pre-existing conditions are handled on a case-by-case basis. Coverage is heavily dependent on the severity of the condition and risk to the insurer for future claims. The only way to get an official offer is to fill out an application and have it underwritten. Scheduling an appointment with Tenzing will help you find providers who accept your condition, and ultimately decide on the best policy for you.

Contact us below and we’d be happy to have a confidential conversation.

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