There has been stories in the news regarding carriers rescinding (or canceling) coverage after approval. It immediately strikes up fears that the general public has regarding health insurance carriers and their practices.
Let's take a look at these specific situations and how to avoid having your California health insurance plan falling into similar although rare jeopardy.
From what we understand, the specific situations involved health information (regarding existing or pre-existing conditions) that were excluded from the medical questionnaire on the health application. This is almost always the issue with rescission. Equally concerned about this situation, we asked the carriers for an explanation.
What was not reported often in the media is that the court ruled that the carrier has to prove the applicant knowingly or intentionally withheld critical medical information in order for the carrier to rescind or withdraw health coverage. This is very difficult to do. The carriers said that rescission was only used in a small percentage of very serious abuses.
Let's discuss how to avoid this all together.
First, choose a strong carrier.
There are sub-par
carriers and association
plans that we do not feel as
confident about...both in
their practices and their
ability to be long term
partners. We only quote
California health insurance
carriers on this site that
we trust on both accounts.
Secondly, be thorough, honest, and complete when filling out the California health application. This is especially true for the medical questionnaire part on the app.
Prospective applications will ask if they should leave off information that may increase their rate or have coverage denied to them altogether. The answer is a resounding "NO".
If you not put the information on the application, it can result in rescission of your coverage.
Even worse, the omittance of information usually shows up when a serious health situation occurs which is tied to the pre-existing condition left off. It's a very bad situation and one to be avoided at all costs. If you are honest and complete with the application, you can feel safe going forward if something happens health-wise.
Pregnancy is a little tricky. If you are pregnant or have missed a monthly period for a period of time (carriers have different ways of addressing this), you will be denied individual health insurance (Small Group can be guaranteed issue). The OBGyn will calculate back the date of conception based on fetus size during one of the ultrasounds. There can be situations where you are in a grey area...at the time of completing the individual/family health application, you had not missed your period more than the allotted time and did not know you were pregnant but your date of conception is very close to your effective date and/or your signature date. Our advice is to avoid these situations and do not lapse coverage. Even if you are honest, it is nerve-wracking to be in this grey area so make sure there's plenty of time spaced between effective date date of conception. If you are already pregnant, check with AIM as option through the State.
A common question from
applicant is "how much
information should I put
down?". Be thorough. We
would rather you provide too
much information than not
enough. The carrier is very
concerned about ongoing and
recent situation of any
severity and more serious
issues from the past. Read
the questions and the
initial explanation very
carefully to understand
their requirements and time
constraints. It's important
to provide the results (or
status) of a pre-existing
condition and to give the
best information in terms of
beginning/end date of the
given situation. Not only is
this required but it is your
interest to give the health
underwriter a good idea of
what is involved. They can
then request medical records
if more detail is needed.
If you feel your coverage has unfairly rescinded, you can address the carrier directly or contact the Department of Insurance.
Call us at 800-320-6269 with any questions. Our services are free to you as licensed health agents.
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