Several times each week, we talk to clients who have been declined by a health insurance carrier in the past. Quite often they express concern about the “black mark” on their record, and wonder if they will ever be able to qualify for a medically underwritten policy. So I thought I’d clear up some of the most common misconceptions about individual health insurance underwriting and previous declines.
It’s true that there is a question on individual health insurance applications that asks if you’ve ever been declined for a health insurance policy in the past. And you must be truthful in answering that and every other question on the application. But this is just a method that health insurance underwriters use to create a complete picture of your medical history and the amount of risk that they would be taking on if they accept your application. They’ll see the reason for the decline among the answers you provide to their questions about your medical history, and it will be subject to their own underwriting guidelines.
Every individual health insurance carrier in Colorado has underwriting guidelines that are used to determine an applicant’s eligibility for coverage. Those guidelines vary widely from one company to another, as do the underwriting actions that each company takes. Some companies operate on a strict “accept or decline” basis. If they determine that you have a pre-existing condition that precludes a standard offer of coverage, they will decline you. But most companies have the ability to offer policies with exclusions for pre-existing conditions, or increased premiums (but no exclusion) for people with pre-existing conditions.
All health insurance companies in Colorado have a list of conditions that will cause an applicant to be declined. But the lists are not the same from one company to the next. Yes, some conditions are on every list and will result in a decline no matter which company you choose. But there are other conditions that will result in a decline with one company and a rate increase or exclusion with another company. If you’ve been declined in the past, or are concerned about getting declined, we can let you know if there are companies that might consider you for coverage. If there aren’t, Cover Colorado is a great option.
Don’t give up hope if you’ve been declined by a health insurance carrier. Each company will use their own set of underwriting guidelines, and there may be a company out there that works, even if the last one you tried didn’t.
{ 2 comments… read them below or add one }
The whole thing is hogwash! There are plenty of cases that one can point to where the consumer has been throuwn off their insurance and are not allowed or are routinely declined for insurance purposes. The fact that there are a total of 5 companies for the entire nation shows there is NOT that much variety in choice between one company and the next. ALSO the fact that none of these 5 companies must compete and they often collude to increase their profits is another reason that these insurers can and DO share their information. If a company black-lists you, your health could be perfect and you still will be refused coverage!
Brian,
While it’s true that there are some conditions that will result in an underwriting decline from just about every carrier, this is because most carriers have somewhat similar underwriting guidelines when it comes to the more serious health conditions.
But if you apply for coverage through company A and get declined, that does not mean that you’ll get declined with company B – unless they also have the same underwriting guideline for the condition that caused the decline with company A. The main point is that each company has their own underwriting guidelines, and they apply those guidelines independently.
As far as the number of health insurance carriers, according to the Colorado Division of Insurance, there are 392 carriers doing business here in Colorado.