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California health insurance  -  California individual health insurance  -  Medications effect on qualifying for health coverage

How Your Medications Affect Individual California Health Insurance Underwriting

UPDATE:  Most California health plans are no longer medically underwritten.  Run your quote for guaranteed issue plans here.

Medication has been a pretty good proxy for the ebbs and flows of California health insurance over the past 10 years. The explosion on the scene of brand name medications and their popularity precipitated the consequential rise in health insurance.

We can remember the onslaught of the brand allergy medications Allegra, Zyrtec, and Claritin. The costs were significant and the carriers panicked. It seemed that every other applicant was on one of these medications to the tune of around $80/monthly.

There was a time when a Claritin prescription would result in a declination at the height of the panic.

That was the beginning.

The carriers responded with brand name deductibles and lower benefits for medications. This was a trend that would only continue in the cat and mouse race between medication cost and California health insurance costs.

These days, a medication can run 10's of thousands of dollars per year on an ongoing maintenance basis.

Let's take a look at how underwriting looks at medications and also discuss what will happen when Health Reform takes firm hold January 1st, 2014.
Many conversations we have with prospective health insurance shoppers goes this way when discussing their current/recent health status for qualifying. "I'm healthy...nothing going on". Great...underwriting should be easy. "Any medications?".

They invariably reply, "Well..yes, I take Lipitor for cholesterol but it's fine now.

I also take a blood pressure medication and a med for depression".

This is pretty common on today's world.

We see multiple ongoing medications. The first thing to realize is that there is a difference between between generic and brand as well as between episodic (medication that will end) and maintenance drugs (ongoing treatment).

Let's see how this affects your chances to qualify based on health.
First, the generic versus brand name drugs issue. Brand name drugs are much more expensive than generics even if they treat the same disease.

Brand names usually reflect the very high cost of bringing a new medication to market. The cost reflects this to the end consumer. Whether your prescription is generic or brand can impact the response we get from a California health carrier. Keep in mind that if you're on a brand name drug or have recently been, the underwriters will make their decision on this particular medication.

Planning to change to generic, recently stopping or changing the medication will not affect this decision. We generally need a good 3-6 months away from a given medication where the underlying condition is sign, symptom, and treatment free.

Many doctors don't distinguish between brand or generic so you should ask if there are generics available providing that your doctor agrees with any changes.
The maintenance versus episodic follows the same rules above for stopping and changing. If you're on a maintenance drug, the carriers will assume this will continue even if you plan to stop. They will go based on current/recent information. If you just stopped the medication, they will assume the medication will continue when the policy is issued.

That's why we need more time away from the situation as mentioned above with the 6 month (for more simple situations). Episodic might be antibiotics for an infection or any medication that is scheduled to end.
The more medications a person has, the more chance that they will be rated up or declined. There's a cumulative effect which gets to the heart of how California health insurance carriers look at medication.

They look at the cumulative monthly cost that medications pose. If your monthly medications are under $40, we're probably looking at a slight rate up (maybe 25%). If they're between $40 and $100, we're probably looking at a higher rate up (maybe 50%+). Beyond $100/monthly, it might be difficult to qualify based on health. There are options available for people unable to qualify for health insurance in California which we cover here.
Effective Jan 1st, 2014, health insurance in California will be guaranteed issue which means that you cannot be declined coverage based on health. The net effect of this is that the cost of coverage will go up significantly. We'll have to wait and see how all this plays out but any plan that starts till then will end on Jan 1st, 2014 anyway so we'll all march in together.

 

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