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April 09
Guide To Understanding How Medical Status Impacts Insurance

Guide To Understanding How Medical Status Impacts Insurance

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How Medical Conditions Can And Cannot Affect Insurance Rates

It is more important than ever to have medical insurance. Drug companies, medical institutions and healthcare providers are all facing rising costs—costs that are passed on to their customers and patients who don’t have medical insurance. Often times those who are uninsured are denied services and treatments altogether simply because of their lack of ability to pay. In the unfortunate event that you or one of your family members becomes seriously ill, you will undoubtedly want to seek the best quality care. Medical insurance can help you do just this. You will have access to the best doctors and facilities possible, without paying astronomical amounts for care. What’s more, with the passage of the Affordable Health Care Act in March 2010, Americans that don’t have medical insurance are subject to a $695 penalty tax. Why not put that money towards health insurance instead? Insurance companies are now required by law to cover the cost of many preventative services such as mammograms, blood pressure screenings, diabetes screenings, child immunizations and more without any copays or deductibles.

Calculating Premiums

Another benefit of the Affordable Health Care Act is that companies can no longer deny coverage based on pre-existing conditions. That being said, your medical history will still factor into the affordability of medical premiums. Chronic conditions or illness such as allergies, asthma, diabetes, epilepsy, hemophilia, multiple sclerosis, obesity or skin diseases and/or other conditions may increase your premium. This is because people suffering from these conditions often require more frequent treatments than those without. Other factors that insurance companies consider when calculating premiums include:

  • Age
  • Gender
  • Previous jobs
  • Lifestyle (including high risk activities such as alcohol consumption and tobacco usage)

Knowing these things about their customers helps insurance companies predict how much money they will spend on health care during the years ahead. As of January 1, 2014, however, insurance companies will no longer be able to charge different premiums based on gender or previous jobs. Instead, they will only be able to adjust premiums legally based on:

  • Individual or family enrollment
  • Geographical area
  • Age
  • Tobacco use

Application Process

Despite efforts to regulate insurance companies, sometimes the ratings practices of insurance companies still discourage people with pre-existing conditions, chronic illnesses or high-risk lifestyles not to apply for coverage because they believe the premiums will be too expensive. This may or may not be true. After filling out an application and disclosing certain conditions, the insurance company may require additional medical tests in order to determine your estimated premium. These tests can often work in your favor. For example, if you were considered obese or diagnosed with diabetes in the past but have worked hard to lose weight and adopt a healthier lifestyle, the test results will reflect these changes and the insurance company should adjust your premium accordingly. You can expect the entire process from application to testing to underwriting to take longer than usual, however, because of the added complexity of the actuarial and underwriting process. The added length of time does not necessarily mean that you will be charged a higher premium.

Honesty Is The Best Policy

While it may be tempting to falsify your application or omit information in some way, honesty is always the best policy. Many insurance companies investigate applicants before they issue a policy or paying out for certain treatments. If you lie about a pre-existing medical condition or do not admit to bad habits such as smoking and the insurance company later finds out your insurance policy can be terminated. In today’s electronic age of information, it is easier than ever for insurance companies to investigate you. A picture on Facebook of you smoking a cigar at a bachelor party after checking the “never” box on your application can end up costing you tens of thousands of dollars in medical benefits. The cost of this far outweighs than even a hefty premium increase. Insurance companies cannot drop your coverage, however, due to an honest mistake on your application. In the event that your insurance company wants to rescind your policy, they must give you a minimum of 30 days’ notice prior to doing so. This will give you time to appeal the decision if you believe you are being treated unfairly or obtain coverage from another provider if you are legitimately being dropped.

How To Get Discounts On Premiums

More and more medical insurance providers are offering discounts on premiums for making healthy lifestyle changes. Exercising more, making office visits for preventive care, receiving flu shots are often rewarded with discounts on premiums. You may also be encouraged to set personal goals such as lowering your cholesterol or triglycerides. Once follow up test conclude that you have met those goals, you may be eligible for a lower premium during the next calendar year. Be sure to inquire about such incentives and discounts when shopping for medical insurance. Sometimes these discounts are often enough to offset the increased premium for chronic conditions or illnesses.

The Bottom Line

Having adequate medical insurance coverage is important to both the quality and longevity of your life. If you don’t currently have medical coverage now is a great time to start shopping around. There are a number of different individual and group plans that can be tailored to fit your needs. You shouldn’t be discouraged because of a pre-existing injury or chronic condition. Take the time to fill the application out thoroughly and honestly to see just how affordable the premiums can be.