The Impact of Access Regulation on Health Insurance Market Structure. B. Preexisting Condition Exclusions


At the time HIPAA was passed, 43 states limited the extent to which insurers could consider preexisting conditions in small-group plans; 45 states limited the length of time that insurers could exclude coverage for preexisting conditions in small-group plans (see Table 2). HIPAA limited the duration of preexisting conditions in small-group plans to 12 months for conditions that exist within 6 months before coverage, and most states with laws in place met HIPAA’s provisions related to preexisting condition exclusions. By 1999, 3 states had more restrictive laws than HIPAA requires prohibiting lengthy look-back periods in the small-group market (not more than 1 or 3 months), and 8 states had more restrictive laws limiting waiting periods (most often, to 6 months or less).

HIPAA does not restrict either look-backs or waiting periods for coverage of preexisting conditions in the individual market. However, in 1999, 34 states restricted look-backs in the individual market, usually to 6 months or 12 months. Limits on waiting periods for preexisting condition exclusions are also common. In 1999, 35 states limited waiting periods for individual coverage of preexisting conditions, typically to 12 months.1