Insurance Rx?

by Lesley Politi on June 11, 2009

 A normal Application for most Carriers is about 15 pages, which consist of 20 medical History questions going back 10 years as well as all doctors, last visit and all prescription drugs. The same goes for the online application but the difference is they will not let you move on until you completed everything properly.

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Californians should not lose their health insurance because of inadvertent mistakes on complicated enrollment applications. So proposed new regulations that crack down on that abusive practice offer a necessary consumer protection. And they should be standard practice for all health insurers in the state. 


Those steps seem like common sense, but are not required practice in California. State law lets insurers cancel individual policies if customers misrepresent their medical history, to prevent people from fraudulently obtaining health insurance. But insurers have interpreted the law to mean they can rescind coverage for any inconsistency or incorrect information on an application form — even if insurers only discover the inaccuracy after customers file claims. And because insurance forms are confusing, innocent mistakes are common.

But insurers need to determine whether a customer is a good risk before medical expenses start piling up. A system that lets insurance companies revoke coverage for inadvertent errors after customers file a claim subverts the whole point of insurance.

Nor is that practice a rarity. The Department of Insurance reached settlements with three insurers in 2008 and 2009 regarding nearly 4,000 people whose policies insurers had improperly revoked between 2004 and 2008. The Department of Managed Health Care, which oversees HMOs, signed insurer settlements in 2008 covering another 3,300 people who wrongly lost coverage during the same period.

The state’s fragmented regulatory structure means the new rules would only apply to insurers overseen by the Department of Insurance. The Department of Managed Health Care said last week it is not pursing similar regulations, but relying on the agreements with five large insurers. Insurers and consumers would be better off with a consistent approach for everyone.

Still, the proposed regulations properly curb abuses that put insurer profit before good-faith practices. Even a partial solution still counts as progress.


I think its a great idea to make the Health Insurance Application easier for Applicants. When completing the forms, its very easy to miss something, forget about a medical issue from 9 years before or not have every date, doctors number and address.


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The state Department of Insurance last week unveiled proposed rules governing the individual insurance market — for people who do not get health coverage through their employer. The new regulations could be in place by year’s end.

The rules create new requirements for insurers to meet before they can revoke a policyholder’s coverage. The regulations would oblige health insurers to provide easily understood application forms. And the rules would mandate that insurers thoroughly check applicants’ medical histories, including discrepancies on enrollment forms, before issuing policies.



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