Is medical underwriting in individual health insurance legal?

States regulate the individual health insurance market. The rules as to who can purchase and what is included in the coverage vary depending on where you live. The individual health insurance market in most states is characterized by "medical underwriting." That is, insurers in this market decide whether to sell coverage (and if so, what benefits to offer and what premium to charge) based on the health status, prior medical history, age, gender, and other characteristics of applicants. Diabetes is a condition for which most medical underwriters will automatically deny coverage. However, this is not true in all states. For example:
  • In a few states, medical underwriting is always illegal in the individual health insurance market. All policies in such states must be sold on a "guaranteed issue" basis, meaning nobody can be turned down based on their health status. These states also prohibit insurers from charging premiums based on health status. Instead, insurers must use a single "community rate" for their premiums for all residents.
  • In other states, only certain residents (such as those with a continuous coverage history) must be sold individual health insurance on a guaranteed issue basis.
  • A few other states designate one or more insurance companies as an "insurer of last resort." These companies (usually Blue Cross Blue Shield plans) must guarantee issue coverage, but other insurers can still medically underwrite. Community rating may or may not apply to the insurer of last resort, depending on the state.
  • In most states, all private insurers in the individual market can medically underwrite coverage at least some of the time. Many (though not all) of these states establish high-risk pools, which are public programs that offer coverage to certain "uninsurable" individuals whom private insurers turn down.

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Important: This content reflects information from various individuals and organizations and may offer alternative or opposing points of view. It should not be used for medical advice, diagnosis or treatment. As always, you should consult with your healthcare provider about your specific health needs.