Credit for Prior Credible Coverage
Any pre-existing condition waiting period met under an employer’s prior (qualifying) coverage will be credited to the current plan, if any interruption of coverage between the new and prior plans meets state guidelines.
Not having a lapse in Health Insurance can be very important, especially if you have health issues. If you go without Health Insurance coverage for more than 63 days, you open yourself up to potential problems with health insurance. If you go without for more than 63 days and you have some issues then, due to not maintaining continuos coverage you have opened yourself up to waivers and exclusions from coverage.
This means that your previous condition can be excluded from coverage for a period of time (usually 12 months). After this period any treatment for this condition will then be covered by your plan.
In this context a waiver is similar to an exclusion. In other words the insurance company can waive coverage for a specific issue – but only for a defined period of time.
With both waivers and exclusions, the time period must be spelled out to the applicant up front and you should have a mandatory 30 day free look to make up your mind as to whether to accept the coverage at the price presented.
If you are presented a waiver or exclusion and given a rate increase (called a rate up) on an individual plan, I would recommend you use this time period to shop the market by making a second application to a different insurance company.
In a group plan there would not be a rate increase when you put in your application. Rate changes for group plans happen only once a year when a group plan renews. The group is rated as a whole with all the good and bad of the company as a “group” mixed together and given a price or rate.
Credible coverage for credit for prior coverage is proof that you have had health insurance coverage for a period of time and when changing or trying to change insurance companies, this will inform them of your specific prior coverage. So you should not be given a waiver or exclusion as discussed above.
When leaving a health insurance company, make sure to ask to get a letter of credible coverage to use as proof for your next carrier or insurance company.
And last but not least, the following video does a good job of explaining private health insurance in the USA.
Although a little dated (Feb 2009), it includes good basic information. It’s about 11 minutes long and gives a
broad overview on both group and individual health insurance.
The three major classes of major medical coverage are:
- Indemnity (Fee for Service)
- PPO (Preferred Provider Organization
- HMO (Health Maintenance Organization)