Health Insurance – are you covered for a pre-existing condition?

Aug 22, 2022

If you are looking for a health and dental plan for yourself and/or your family there are numerous insurance companies in Canada that offer it, but you should read the fine print before you apply. Most plans offered are medically underwritten and although you may answer all the questions and they approve you for a policy, it doesn’t mean that your current medications are covered. That’s right, you could be in for a surprise when you go to submit your first prescription expense and it is declined.   This is because there is a clause in all medically underwritten plans that excludes all pre-existing conditions.

What is a pre-existing medical condition?

In health insurance, a pre-existing condition is any medical or health condition that existed before the insurance application. This can include medications and medical devices for asthma, diabetes, anxiety, depression, high blood pressure, high cholesterol, etc.  It is important to note that this also includes manifesting symptoms that a reasonable person would have or should have sought medical advice or treatment.

At first glance, having this exclusion may not make sense, but let’s look at it from the insurance company’s perspective: First and foremost, they are a business and businesses need to make money. The medically underwritten plans give you the best rates and the best coverage as they assume you are healthy and currently do not have any medical expenses besides dental and massages, etc.  Insurance companies work by crunching numbers and running probabilities. When you have a condition that requires a lot of treatment, it costs more for the company to keep you covered. Therefore, to keep their medically underwritten plans at the best rates, they exclude pre-existing conditions.


Can you be denied health insurance because of a pre-existing condition in Canada?

No, don’t worry, having a pre-existing condition will not prevent you from having coverage, it simply means that that specific condition won’t be eligible under a medically underwritten plan.  However, ou could still have coverage for everything else such as all future medical conditions, dental, massages, etc. If that isn’t sufficient for you your needs, there are a multitude of different types of policies and plans available that will cover it. 

What does it mean when a plan is medically underwritten?

Medical underwriting is the process of evaluating an application for health insurance coverage by examining your medical history. This involves the answering of various medical questions as well granting the insurance company permission to access their medical records, if necessary.  Medical records consist of any and all records recorded by a physician, a medical clinic, and visits to a hospital.

What are your options if you have a pre-existing condition?

You can still obtain comprehensive coverage for your prescriptions, dental, extended health care, and travel, regardless of your current health. Here are your options:

  1. Apply for a medically underwritten plan and have your current condition and medications excluded.
    If the cost of your current prescription is low or you do not care if your medical condition is covered, apply for this type of plan. Your current medications may be excluded but any future ones for other conditions could be.  Your coverage amounts will be higher and premiums lower for a medially underwritten plan.
  2. Apply for Guaranteed Issued plan.
    This type of plan accepts everyone — no matter who you are or state of health. No medical questionnaires are required. The coverages will be lower and premiums will be higher than a medically underwritten plan
  3. Apply for a ‘transfer’ policy.
    If you are covered under an employer provided health and dental plan – whether it is your employer, or a partner/spouse’s, or even if it is your parent’s employer’s plan and are doing so within the last 60-90 days – you can get coverage without medically qualifying. The coverages are generally better and premiums lower than a guaranteed issue plan.
  4. Set up an HSA.
    If you are a small business owner who is a) incorporated or b) has one non-arm’s length employee you can set up a health spending account (HSA). An HSA incorporates principles of tax planning paired with medical insurance and is created specifically for small business owners. This is not a traditionally structured health and dental plan like those discussed above. There are no monthly premiums and instead, the full medical expense is paid personally whomever is making the claim then it is reimbursed by the corporation. Another magical thing …. there are no pre-existing condition clauses to an HSA. All this combined makes HSAs an extremely cost-effective method of providing or supplementing health and dental benefits. Read more here on HSA’s.

Although it could be tempting to not disclose your pre-existing condition, it is not something you should omit from your application, as that is a fraudulent act and will void your policy. It’s much better for everyone if you tell the whole truth and leave nothing out.

If you have questions or want to know your coverage options, we provide free quotes from multiple companies with a side-by-side comparison to help you determine which plan is right for you.

About the author

  • Pam is the founder and “boss lady” of Savanti Insurance Agency and Savanti Investment Team (attached to PEAK Securities Inc.). She has over 15 years where she specializes in planning, investments, risk management, and tax-effective strategies for clients’ personal and/or corporate financial needs.

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Although this article was written with the utmost care and based on sources deemed reliable, there is no guarantee of its accuracy or applicability to all specific cases. This article is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. All content and information are of a general nature and does not address the circumstances of any particular individual or entity. Many of the issues discussed will vary by province. Individuals should seek the advice of professionals to ensure that any action taken with respect to this information is appropriate to their specific situation. The opinions expressed in this article do not necessarily reflect those of Peak Securities inc.