Guaranteed Issue

What Is A Guaranteed Issue

A guaranteed issue, in the health insurance industry, refers to a scenario where an insurance policy is offered to any eligible applicant regardless of health status or pre-existing conditions. Thanks to the Patient Protection and Affordable Care Act, also known as Obamacare, anyone with pre-existing conditions is guaranteed to be able to purchase a health insurance plan.

How a Guaranteed Issue Works

A guaranteed issue works by allowing an individual with pre-existing conditions to purchase a health insurance policy. Guaranteed issue solved the problem that existed prior to Obamacare, where many people with pre-existing conditions were uninsured due to being rejected by health insurance providers, or not having the funds to purchase the more expensive health insurance options available to them. 

What Are the Rules for a Guaranteed Issue?

The rules state that insurance companies must sell policies to everyone; however, this mandate is only for individuals and not companies. Before Obamacare was passed, only a few states had a law like this, leaving most of the US at the mercy of the health insurance companies.  

Who Is Eligible?

Everyone who purchases an Affordable Care Act-compliant plan is eligible to receive healthcare benefits. This is true regardless of any pre-existing conditions, or whether they've been denied health insurance prior to the passing of the Affordable Care Act.

Are There Any Exceptions to the Guaranteed Issue Rule?

Please note that the rules do not apply to grandfathered or grandmothered plans, or plans that were issued before 2010. The difference between grandfathered and grandmothered plans is simple: Grandfathered plan rates have not changed while grandmothered plans have changed. Both individuals and groups could have these plans and won't be protected under the guaranteed issue rule. 

Guaranteed Issue vs. Pre-Existing Conditions Insurance Plan

You could, in the past, purchase a PCIP, or Pre-Existing Conditions Insurance Plan. However, these types of plans ended in 2014. PCIP usually insured people who were without insurance for at least six months or who were denied coverage based on a pre-existing condition. Thanks to the new rules, these plans are obsolete, and now everyone can be covered.