Think a Pre-Existing Condition Means No Health Insurance? Not Always

A lot of people assume once they’ve had a conditions like a bad back, anxiety, high blood pressure, surgery, asthma, or any medical treatment they’ve completely “missed the boat” for health insurance.

That’s not always true.

In reality, many people with pre-existing conditions can still get great quality health cover.

The important part is understanding:

• what may be excluded
• what may still be covered
• and how different insurers approach underwriting

Because health insurance isn’t usually an all-or-nothing situation.

What is a pre-existing condition?

A pre-existing condition is generally described as a medical condition, symptom, illness, injury, or health issue that existed before the policy started.

Think of things like

• prior surgeries
• ongoing investigations
• chronic pain
• diagnosed conditions
• symptoms not yet diagnosed
• medication history
• previous specialist referrals
• emergency admissions

What surprises people is that it doesn’t always need to be something “serious”.

Even relatively common things treated by a medical practitioner can are relevant during application and underwriting.

Think of every day issues that many people don't think about and just live with; migraines, reflux, muscle pain, anxiety, eczema, high cholesterol, high blood pressure and even BMI.

If it existed before the policy started, insurers usually want to know about it.

Just because you have to tell them doesn't always mean that the condition wont be covered.

Why do insurers ask health questions?

Health insurance works very differently from things like car insurance. Insurers are assessing future medical risk. Unlike a crashed car, healthcare costs can continue for years or even decades.

That’s why underwriting exists.

Health disclosures help insurers understand what future risks they are exposing themselves to. Without that information, insurers would effectively be agreeing to cover unknown existing medical costs after the fact.

Which obviously becomes difficult commercially and will mean higher premiums for everyone.

People say that their GP told them not to worry about it so why are the insurance company concerned. An insurance company is signing a legally binding contract. One that it can't alter without a very good reason, like not disclosing a pre-existing condition. A GP can change their mind at the next appointment.

What happens if a company doesn’t ask health questions upfront?

Clients have said to me that, "this company doesn't ask medical questions, so I'll get cover with them."

Some health insurance products have simplified applications with little or no upfront underwriting.

Sounds convenient and many people think they are fully covered by the policy. They believe that the heart murmer, high BMI, migraine, high blood pressure, or gout will be covered. That they have got round the system.

Here's the catch: underwriting often happens at claim time instead.

That means the insurer will investigate:

• medical history
• GP records
• prior symptoms
• specialist involvement
• previous treatment

when someone actually tries to claim.

That can create unpleasant surprises if people assumed they were fully covered. This isn’t automatically “bad”. It’s just important to understand how the process works. Being “accepted quickly” and “fully covered” are not always the same thing.

Why do insurers apply exclusions?

This part frustrates people sometimes.

From the insurer’s perspective, exclusions are usually about managing known risk rather than avoiding every possible claim.

For example:
if someone already has significant knee degeneration before taking out health insurance, the insurer may exclude treatment related to that knee.

Otherwise people could effectively wait until expensive treatment becomes likely before joining. Then cancel the policy.

Health insurance works because risk is spread broadly across healthy and unhealthy members over time. If people could sign up, get treatment and then quit the policy there would be no health insurance.

Some exclusions are temporary. Others are permanent.

Not all exclusions last forever. It's not always black and white.

Some insurers may review exclusions after a period of time if symptoms improve, no treatment is required, medications stop, medical stability is demonstrated or a diagnosis changes.

If the condition is chronic, degenerative, recurring, or statistically likely to create ongoing claims in many cases the exclusion will be permanent.

The good news is that this varies quite a bit between insurers. Which is why an independent adviser is a good idea, one with access to all the major health insurers and not just one or two.

Remember that even if there are exclusions, it's not always about what isn't covered but what is still covered. This is a really important mindset shift.

Some people focus so heavily on one exclusion that they overlook the fact they may still be covered for cancer drugs not available to the general public, other conditions and surgeries unrelated, treatment abroad if it's not available in New Zealand, fast access to imaging and diagnostics, treatment in weeks rather than years.

A knee exclusion may be annoying but what about the hundreds of other medical scenarios?

How broad can exclusions become?

This part matters. Exclusions are not always narrowly targeted. Sometimes they can extend beyond one exact diagnosis.

For example an exclusion for diabetes will include any condition linked to diabetes. This can be extensive. Heart, liver, kidneys, eyes, skin infections or anything that a specialists can't categorically state is not a result of diabetes. In these circumstances then a policy has to be carefully considered.

This is why understanding the actual wording matters enormously and an impartial, independent adviser is worth speaking to. Two exclusions that sound similar can operate very differently at claim time.

Different insurers approach pre-existing conditions differently

This is where advice becomes useful because underwriting philosophies vary quite a bit. The following is not an endorsement of any particular company and nor is it specific advice. Contact me directly if you want to discuss your own situation.

Partners Life

Partners Life is often known for more detailed underwriting upfront. The upside is there can sometimes be greater certainty around what is and isn’t covered once terms are accepted.

They don't offer cover for primary care, like GPs, dentists and optitions. They also have a mandatory excess for specialists. However, at time of writing, they do have the best wording for those drugs given in hospital that are not available through the public system. Vital in cancer treatment.

Partners Life will also waive any excess up to $10,000 for certain conditions, like cancer.

Exclusions can be permanent, especially for chronic or recurring health issues.

AIA

AIA offers health insurance for surgery and specialist but not for GP's, dentists or opticians. For those concerned only with cancer it offers a Cancer Cover policy.

Both policies offer cover for non funded cancer treatments.

They also underwrite in advance and can be strict, declining clients that are too high a risk as well as placing exclusions that can be permanent for serious, chronic or recurring conditions.

UniMed

UniMed/ Accuro have a range of health cover options and even offer discounts for those employed by the health service. They offer options for GP cover as well as dental, optical and alternative treatments. Like AIA cover includes cancer treatments that are not generally funded by the health board.

Underwriting is carried out at application time and the expectation is that serious, chronic and recurring conditions will be excluded permanently.

Southern Cross

Southern Cross offer an extensive range of covers. Their UltraCare plans offer more comprehensive cover which includes specialist consultations, diagnostics, testing, GPs and the UltraCare 400 even includes dental and optical cover. Where the UltraCare policies beat the market is offering cover for all qualifying pre-existing conditions after 3 years. This cover for existing conditions even continues if the policy is downgraded in the future.

On the downside this cover can be more expensive as it is quite comprehensive. Additionally there is no cover for non-funded cancer drugs unless it is added to the policy.

nib

nib also offer a wide range of policies with options to enhance them. Their Easy Health products are often positioned as simpler entry-level options with more streamlined structures and affordability-focused features. They also allow cover for many pre-existing conditions after three years. They won't cover pre-exisitng heart, cancer, knees, back and hip conditions and this includes those with a high BMI.

Acceptance is quick and there is no prior underwriting, it will be carried out at claim time.

To gain cover for non funded cancer drugs it is necessary to pay for an optional benefit. Additionally once cover is in place with Easy Health clients can't move to a different nib policy.

Employer and workplace health schemes

Some employer or workplace health schemes may offer simplified underwriting, medical acceptance limits and cover for pre-existing conditions. This cover can be immediate depending on the size of the work force.

In some situations, joining through work can help people access cover they may struggle to obtain individually. Employees can also take this cover once they leave the employer, providing they are willing to pay the premium themselves.

Employee health schemes are a great way to get all staff and directors cover for pre-existing conditions.

What good advice around pre-existing conditions should involve

Good advice in this area is rarely about magically “beating the system”. It's about understanding underwriting properly, knowing which insurers may be more suitable, explaining exclusions clearly, setting realistic expectations, and helping people understand where value still exists

Because the goal isn’t necessarily perfect cover.

Sometimes the goal is simply improving protection meaningfully from where things currently sit.

And often, that’s still very worthwhile.

FAQ

What counts as a pre-existing condition?

A pre-existing condition is generally any medical issue, symptom, illness, injury, or treatment that existed before the policy started.

Can you still get health insurance with exclusions?

Yes. Many people still obtain valuable health insurance cover even if some conditions are excluded. Some companies will even allow cover for existing conditions after a period of time as a member.

Are pre-existing condition exclusions permanent?

Sometimes. Some exclusions may be reviewed later if health improves or the condition stabilises, while others may remain permanent. Others will automatically be removed after a certain time.

Do all health insurers ask medical questions upfront?

No. Some insurers use simplified applications and assess medical history later at claim time instead.

Can employer health insurance help with pre-existing conditions?

Sometimes employer or workplace schemes may offer simplified underwriting or more flexible acceptance terms depending on the scheme structure.

Cover Yours Ltd (FSP769531) and Marc Hamilton (FSP306046) are registered Financial Service Providers and you can search the register here. Marc Hamilton is a member of the FSCL Disputes Resolution Service. Cover Yours Ltd and Marc Hamilton’s disclosures can be found here or by emailing marc@coveryours.co.nz