Question

Patrick purchased a long-term care policy. He has a health condition for which Medicare treatment was recommended by a physician within 6 months prior to the policy's effective date. This condition is called a:

A) Pre-existing condition
B) Waiting period
C) Exclusionary condition
D) Copayment requirement

Answer 1

A physician-recommended Medicare treatment for a health condition within 6 months prior to a policy's effective date classifies the condition as a pre-existing condition, which insurance companies could have denied coverage for before the ACA.

Step-by-step explanation:

The health condition that a physician recommended Medicare treatment for within 6 months prior to the policy's effective date would be classified as a pre-existing condition. A pre-existing condition refers to any health issue that an individual has been diagnosed with or has received treatment for before the start of a new health insurance policy. Prior to the 2010 Patient Protection and Affordable Care Act (ACA or Obamacare), insurance companies could deny coverage for pre-existing conditions.

This practice was changed by the ACA, which prohibited insurers from denying coverage or charging extra for these conditions. The primary issue here is that insurance pools need a mix of healthy and sick individuals to maintain stability, but an excess of individuals with pre-existing conditions could lead to higher costs for everyone, potentially resulting in a detrimental cycle known as an insurance death spiral.