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Medical Underwriting
Many forms of insurance require medical underwriting during the application process. The underwriting process involves examining an applicant’s medical history to help inform the cost of coverage. In some cases, medical underwriting can lead to exclusion of coverage for certain conditions or denial of coverage altogether.
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How Does Medical Underwriting Work?
Medical underwriting can be performed for one individual or a small group, like a company. When underwriting is being done for a company, individual scrutiny is not often required. During underwriting, the insurance companies review medical history, demographic profile, lifestyle factors, and other factors, such as the candidate’s future medical needs. An actuarial analysis is then performed to estimate the level of risk for the person or company being covered.
How Is Medical Underwriting Regulated?
There are many laws that limit medical underwriting. For example, Medicare supplement plans cannot take into account an individual’s health history when setting rates for people who recently became eligible for Medicare. The Affordable Care Act also limited the ability of health insurance companies to set rates based on health history for people who bought coverage through exchanges. People purchasing Marketplace coverage also cannot be denied based on pre-existing conditions. Coverage cannot be limited in these instances either.
Downsides of Medical Underwriting
Many believe that medical underwriting allows insurance companies to keep premiums as low as possible for their customers. Though, critics also say that they prevent people with minor and treatable conditions from getting adequate health insurance. There are many diseases that can make an individual uninsurable, which is a problem. These conditions include arthritis, cancer, heart disease, and even being heavily overweight. For this reason, many people were happy when The Affordable Care Act was passed, changing the way insurance works in America and making coverage available to far more people.
Start The Underwriting Process
Life insurance plans require underwriting and a medical exam before you can purchase coverage. The same applies to health plans. Though, the level of underwriting allowed varies depending on where you live and which plan you choose. To get started with underwriting on your next insurance plan, call an insurance agent today. We’ll walk you through the application process after we help you find an appropriate plan.
