Pre-existing Conditions and Medical Underwriting in the Individual Insurance Market Prior to the ACA
In 2013, five states – Maine, Massachusetts, New Jersey, New York, and Vermont – required all non-group health insurance policies to be offered on a guaranteed issue basis (meaning applicants could not be denied based on health status) with community rating (meaning premiums could not vary based on health status).
See, for example, L Duchon, “Security Matters: How Instability in Health Insurance Puts US Workers at Risk,” The Commonwealth Fund, 2001. There has also been a long-term decline in employer offer rates. See Kaiser Family Foundation “Diminishing Offer and Coverage Rates Among Private Sector Employees" available at https://www.kff.org/private-insurance/issue-brief/diminishing-offer-and-coverage-rates-among-private-sector-employees/
Under the Health Insurance Portability and Accountability Act of 1996 (HIPAA), eligible individuals who had at least 18 months of continuous prior coverage, who were leaving group health plan coverage, and who met other requirements, had to be offered non-group policies on a guaranteed issue basis with no pre-existing condition exclusions. HIPAA gave insurers flexibility to limit the number of guaranteed issue policies to two. In addition, HIPAA gave states flexibility to offer eligible individuals an alternative source of individual market coverage, such as high-risk pool coverage, which most states elected to do. See Kaiser Family Foundation State Health Facts.