Policy Examples

  • As established in the Affordable Care Act (ACA), medical underwriting is prohibited in individual and small group market health plans. source
  • The Kaiser Family Foundation and the Department of Health and Human Services have concluded insurers pervasively used medical underwriting to hike rates or deny coverage, even for minor conditions. source
  • Most states have not created laws that reflect the ACA protections implemented against medical underwriting, therefore, if the ACA protections were repealed, individuals would be at risk of cost hikes or loss of coverage. source
  • When large and mid-size employers purchase coverage from an insurance company, premiums can be based on the group's overall claims history, which means a less healthy group can be charged higher total premiums than a healthier group. Individual employees within the group are covered on a guaranteed issue basis and are not charged different rates based on their individual medical history. source
  • Federal rules, which took effect January 1, 2014, specifically allow employers to reward or penalize employees by up to 50% of the cost of health care coverage based on tobacco use. source & source
  • Medigap insurance companies are generally allowed to use medical underwriting to decide whether to accept an application and how much to charge for the Medigap policy. However, during Medigap open enrollment a consumer can buy any policy the company sells, even if a consumer has health problems. source

Outcome Evidence

  • A 2018 nationwide survey of adults, age 20 to 59, with diabetes saw a 4% decline in prevalence rate of those with private insurance prior to prohibiting medical underwriting and an 11% increase afterwards. source

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