Glossary
Pre-existing condition exclusion, defined
A policy term that withholds payment, for a set time, for treatment of an illness or injury that was diagnosed or treated before the coverage began. It was once standard in individual health policies and remains in some supplement, travel, pet and disability contracts.
In practice
Federal rules now prohibit it in most individual and employer health plans, so a person switching health insurance is covered for ongoing conditions from day one. It survives elsewhere: a Medicare supplement can apply a waiting period when the buyer lacked prior creditable coverage, and cannot apply it at all under a guaranteed issue right; pet insurance excludes conditions that show up before enrolment or during the waiting period, permanently under many policies; travel policies require a stability period; and disability policies often apply a look-back window. Reading the look-back and exclusion periods is the point: they define how long the buyer carries the old risk alone.
A worked example
Suppose a dog is enrolled in a pet policy in March and was treated for an ear infection in January. Suppose the policy excludes anything treated in the previous twelve months; a $600 ear surgery in August is declined, while a $1,200 cruciate ligament repair the following year, for a new injury, is paid. Hypothetical figures.
Applies to: Health InsurancePet Insurance