Options If Your Health Insurance Application Is Denied

Posted on: February 5th, 2013 by SamTabes No Comments

One of the main aspects of the health insurance industry has been the fact that they avoid giving coverage to the riskiest applicants, typically ones with pre-existing conditions.  While this makes business sense, it’s created a nation where millions of Americans struggle to find health insurance which can prevent them from falling into financial ruin.  Health care reform will ensure that insurers will not be able deny people with pre-existing conditions health insurance, but this does not fully take effect until 2014.  Until then, many Americans are still facing the cold reality that they are unable to find health insurance coverage and this puts us all at risk of higher premiums over time.

The “Health Insurance Application Rejection Rates Rising?” report from HealthPocket states that 22% of applicants across the country are denied health insurance, typically because of a pre-existing condition.  Steve Zaleznick, HealthPocket’s executive director of consumer strategy and development, points out that health insurance carriers are taking pre-existing conditions into consideration as they review applications.  It makes sense they would only approve the lower risk applicants.  It’s concerning though that rejection rates seem to be rising and in some states, including Montana, rates are up to a staggering 45%.

The good news is that by 2014 all health insurance companies will be prohibited from denying someone coverage because of a pre-existing conditions under the Patient Protection and Affordable Care Act.  This even applies to those with major physical problems that could incur high hospital bills over time.  Until this takes effect though, it’s important consumers understand the challenges they may face as they start to shop around for health insurance coverage.

According to the article “Health Insurance Application Denied? Here are 5 Options” by Mark Chalon Smith on FoxBusiness.com, HealthPocket’s report based its data on information from the Department of Health and Human Services and looked at over 9,400 health insurance plans throughout the US.  The report shows some extremely high decline rates up to 45% with an average of 22% for the nation as a whole.  If you are rejected at this point, but are determined to find coverage, you do have options and it’s important to explore all possibilities.

Consumers who are rejected for health insurance can look into their state’s designated insurer that is required to offer coverage to everyone.  Pre-existing Condition Insurance Plans (PCIPs) offer federally administered insurance coverage to those who cannot obtain coverage elsewhere.  Another option is a high-risk pool which is available in 35 states throughout the nation.  They ensure everyone can obtain coverage regardless of their health.  And then there is always Medicaid, Medicare or the State Children’s Health Insurance Program which many lower income families are eligible for and coverage can be obtained even if their are pre-existing conditions involved.

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