Turned down for health insurance? You're not alone

Maryalene LaPonsie | December 7, 2010

In an irony that is not lost on many: those most in need of health insurance are often the least likely to be eligible for it.

In a report that confirmed what many had already suspected, the Congressional Committee on Energy and Commerce found that health insurance companies regularly denied medical coverage based on an applicant's prior medical history.

That's not news to the 651,000 individuals who were unable to obtain an individual health insurance plan from 2007-2009. According to the Congressional report, Aetna, Humana, Wellpoint and UnitedHealth Group instituted policies that automatically denied thousands of applications, without opportunity for further review, based upon preexisting conditions.

425 reasons to say 'no'

While the committee did not reveal specifics from each company, its report shed some intriguing light on the process of reviewing individual health plan applications and claims. Among its findings for the 2007-2009 period:

  • 1 in 7 applicants for individual health insurance was denied
  • Denials for coverage increased 49 percent during the study period while applications increased only 16 percent
  • 212,800 claims were denied for subscribers with preexisting condition riders on their health plan
  • Companies relied on the denial of preexisting condition claims and applicants as a means to "strategic growth"

Again, these results only apply to a review of Aetna, Humana, Wellpoint and UnitedHealth Group. However, it would probably not be a stretch to assume that similar findings would be discovered across the health insurance industry.

Most telling was one company's list of 425 conditions that would result in an automatic denial of an application. With such an extensive list of preexisting conditions, it makes you wonder what might be included. Alongside such heavy-hitters as cancer and heart failure, coverage was denied to applicants who were pregnant, had a BMI of 39 or greater, or who had been recently treated for infertility.

Health reform to the rescue

Recent legislation already prohibits health insurance companies from denying coverage to children with chronic illnesses or a checkered medical past. On January 1, 2014, that protection will be extended to adults as well.

In the meantime, those with pre-existing conditions can turn to state-administered high-risk pools that offer temporary health insurance until 2014 rolls around. While the federal government is subsidizing premiums for many high-risk pool enrollees, the well may run dry long before 2014 arrives, resulting in soaring premiums for participants. In that case, those with chronic conditions might find that they are back to square one with no options and no medical coverage.

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