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‘Coverage Denial for Dummies’

You may have heard anecdotes about what pre-existing conditions insurance companies will use to deny ‘high risk’ individuals health coverage, but have you ever wondered to what extent these practices go in order to limit the companies’ bottom line?

Entire departments (and a good part of your insurance premium) are devoted to rooting these unprofitable individuals out, a process called medical underwriting; some insurance companies even reward the best underwriters (real live ‘insurance bureaucrats’ getting between you and your doctor). Our Santa Monica neighbor, Consumer Watchdog, recently publicized internal insurance company documents that issue specific underwriting guidelines based on occupation, age, common prescription drugs, and a wide range of minor health conditions/symptoms. Remember that these practices are mostly for those outside the employer-based market which is relatively immune to exclusions.

Here are some occupations that are deemed ‘uninsurable’:

Air Traffic Controller
Athlete
Construction Worker
Carnival Worker
Flight instructor
Migrant Worker
Public Utility Worker
War Correspondent

Here are some prescription drugs that make you uninsurable if you are on them:

Allegra (allergies)
Imitrex (migraines)
Lamisil (toenail fungus)
Nexium (heartburn)

These are the more questionable health conditions that can make you uninsurable:

Acne
Asthma
Cataracts
Expectant father
Infertility
ADD
Weighing over 163 lbs. at a height of 5’0″
Weighing over 185 lbs. at a height of 5’4″
Weighing over 215 lbs. at a height of 5’9″

Did you happen to fill out you insurance paperwork in pencil when the instructions say pen? An underwriting investigation following a big insurance claim (maybe you got cancer) may make this grounds for rescission of your coverage. Why do insurance companies do this? The answer is simply because they can. A for-profit plan is most accountable to their investors and stockholders, and no federal law currently regulates these profit-seeking activities. You can read through some of the guidelines for United Health, Blue Cross (Wellpoint), and Health Net.

Reform will make these practices illegal, allowing care to be covered for those that actually need it the most. It will drastically reduce the need for these non-medically related practices and expenses, resulting in lower premiums for all. It will protect people from bankruptcy just because they get sick. Most importantly, it will make insurers compete not on how effectively they can exclude Americans, but through their own administrative efficiencies and healthy lifestyle incentives.