By when would it be illegal for insurance companies to deny coverage because of pre-existing conditions?

A preexisting condition is a term used in insurance law which refers to a medical disorder present and known to the insured before applying for an insurance coverage. Individuals with preexisting conditions are not actually disqualified from getting an insurance. These individuals may avail of an insurance coverage but they will have to pay a higher premium therefor. This is because they will be considered as high risk individuals. On the other hand, those with serious diseases such as HIV, cancer or multiple sclerosis are usually denied.

Generally, insurance companies cannot deny coverage for individuals with preexisting conditions. All that the law allows for them to do is to impose penalties against the insured if the latter committed a material misrepresentation in his application for an insurance coverage. Material misrepresentation means the suppression of facts which may lead to the denial of an insurance application. When a person does not reveal his preexisting medical condition at the time that he applied for an insurance coverage and such condition could have influenced the decision of the insurer on whether or not to approve said application, said individual is considered to have committed a material misrepresentation.

Before the approval of the application for insurance coverage, the applicant is usually subjected to a medical underwriting process. Here, the medical records of the applicant is scrutinized by the underwriter. The applicant’s age, lifestyle, body mass index, doctors and hospital records are carefully examined by the underwriter to determine if the applicant is healthy or low risk or if the applicant is a high risk. If the applicant is found to be a high risk, then higher premiums will be imposed against him. In some cases, if the medical condition is serious, the underwriter has no option but to deny the application.

But, not all preexisting conditions could be discovered in the medical underwriting process. There are conditions which could be intentionally suppressed by the applicant in order for him to qualify as a low risk healthy individual.

In September 2010, the Medical Reform Bill was enacted into law. This changed the majority of practices of insurance companies specifically under the medical underwriting process. Today, insurance companies cannot deny applications for children with preexisting conditions. Further, the law also provides that in 2014, all insurance companies cannot deny insurance coverage from any individual with preexisting condition and that health insurance must be made available to all Americans. The only option of the insurer is to impose higher premiums to high risk applicants.

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