Can a payer cancel the policy or refuse to pay a claim if the patient did not disclose a pre-existing condition?
Crossing My Fingers
Dear Crossing My Fingers,
Yes on both counts. Under federal health reform rules, an insurer can cancel a policy only for fraud on the application. Omitting a pre-existing condition would most likely be considered fraud, especially if the condition is significant.
If the insurer forgave you for forgetting your pre-existing condition, they might still have the right to deny claims for care related to it. If you had a 63-day gap in coverage in the year before you join the plan, for example, the insurer could deny those claims for up to 12 months. (For every month that you had coverage in the 12 months before you joined, your pre-existing condition exclusion shrinks by one month.) After the pre-existing condition period ends, the insurer would have to start paying claims for all of your medical conditions.
The pre-existing condition clauses will all disappear on January 1, 2014 thanks to health reform. Insurers will have to cover all medical conditions, regardless of the person’s gaps in coverage. They will, however, still be able to cancel your policy if you lied on the application.