Medical Underwriting - Understanding Medical Underwriting
Medical underwriting refers to the process in which insurance companies use health or medical information to make decisions about your medical insurance coverage, including your premiums and whether to offer you coverage at all.
While insurance companies believes that the use of underwriting keeps premium rates low, it is also a controversial practice that is not allowed in some states.
This may be true, but nevertheless, this process affects a number of people who are subsequently denied health insurance due to their pre-existing medical conditions.
When you apply for health insurance, most companies will ask for your medical history, which is then used to determine your acceptance or denial.
From the insurance company's perspective, this is good business.
Companies believe that medical underwriting allows them to exclude people who might purchase insurance only when they are sick or urgently need medical care.
This "adverse selection" creates a situation in which people who need health insurance the least are the ones who get coverage, thereby keeping premiums low.
It is true that states who have outlawed underwriting have higher premiums, but what constitutes a pre-existing medical condition is often questionable.
To use an extreme example, people who have acne in some cases could be excluded from medical insurance.
Generally speaking, medical underwriting does not affect health insurance renewal.
State law often makes sure that insurance plans are "guaranteed renewable," meaning that even if you get sick, once you have the policy you will be able to keep it for as long as you choose.
This is, of course, assuming that the premiums are paid.
However, just because you can renew your health insurance does not mean that your rates will stay the same.
Companies may change your rates depending on changes in your health or claim history.
If, during the medical underwriting process, you are denied coverage, you might be able to find an alternative.
Many states have high-risk insurance pools that accept nearly anyone.
There are drawbacks, however, depending on the state.
Make sure to research your state's plan thoroughly before you decide to opt in.
If you are married, consider seeking coverage under your spouse's insurance plan.
Policies provided by employers often do not require a health screening before acceptance.
If all else fails, reform is on the way.
The practice of health insurance underwriting may not go away anytime soon, but starting in 2014, insurance companies will no longer be able to exclude people from coverage based on pre-existing medical conditions.
While insurance companies believes that the use of underwriting keeps premium rates low, it is also a controversial practice that is not allowed in some states.
This may be true, but nevertheless, this process affects a number of people who are subsequently denied health insurance due to their pre-existing medical conditions.
When you apply for health insurance, most companies will ask for your medical history, which is then used to determine your acceptance or denial.
From the insurance company's perspective, this is good business.
Companies believe that medical underwriting allows them to exclude people who might purchase insurance only when they are sick or urgently need medical care.
This "adverse selection" creates a situation in which people who need health insurance the least are the ones who get coverage, thereby keeping premiums low.
It is true that states who have outlawed underwriting have higher premiums, but what constitutes a pre-existing medical condition is often questionable.
To use an extreme example, people who have acne in some cases could be excluded from medical insurance.
Generally speaking, medical underwriting does not affect health insurance renewal.
State law often makes sure that insurance plans are "guaranteed renewable," meaning that even if you get sick, once you have the policy you will be able to keep it for as long as you choose.
This is, of course, assuming that the premiums are paid.
However, just because you can renew your health insurance does not mean that your rates will stay the same.
Companies may change your rates depending on changes in your health or claim history.
If, during the medical underwriting process, you are denied coverage, you might be able to find an alternative.
Many states have high-risk insurance pools that accept nearly anyone.
There are drawbacks, however, depending on the state.
Make sure to research your state's plan thoroughly before you decide to opt in.
If you are married, consider seeking coverage under your spouse's insurance plan.
Policies provided by employers often do not require a health screening before acceptance.
If all else fails, reform is on the way.
The practice of health insurance underwriting may not go away anytime soon, but starting in 2014, insurance companies will no longer be able to exclude people from coverage based on pre-existing medical conditions.
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