Medical underwriting is the process used by insurance companies to evaluate an individual’s health status, medical history, and other risk factors to determine whether to offer coverage, what the coverage terms should be, and how much to charge for the insurance. This process can include a detailed review of your medical records, a questionnaire about your health, and sometimes even a physical examination. The purpose of medical underwriting is for the insurer to assess the risk of insuring an individual and to set premiums and coverage limits accordingly.
Has it been abolished?
With the implementation of the Affordable Care Act (ACA), medical underwriting for individual and small group health insurance plans has been largely abolished in the United States. The ACA prohibits insurers from denying coverage, charging higher premiums, or restricting benefits based on pre-existing conditions. This means that for most health insurance plans offered through the individual and small group markets, including those available on the ACA Health Insurance Marketplace, insurers cannot use medical underwriting to make decisions about coverage.
What kind of medical history has to be disclosed?
Before the ACA, people applying for individual health insurance were often required to provide extensive medical histories, including information about pre-existing conditions, past treatments, and even the results of recent medical tests. Insurers could then use this information to deny coverage, exclude certain conditions from coverage, or charge higher premiums based on the perceived risk.
Exceptions to the prohibition
There are exceptions to the prohibition on medical underwriting. Certain types of insurance, such as life insurance, long-term care insurance, and disability insurance, are not covered by the ACA’s rules and may still involve medical underwriting. Additionally, large group health plans might not be subject to the same restrictions as individual and small group plans and may have different rules regarding coverage and premiums.
In summary, the ACA has significantly limited the use of medical underwriting in health insurance, ensuring that more people have access to coverage regardless of their health status. This has made it easier for individuals with pre-existing conditions to get insurance and has helped to standardize premiums and coverage across the individual and small group markets.
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