You recently lost your job. You decided to forgo COBRA, or the Consolidated Omnibus Budget Reconciliation Act. That’s a law that allows you to stay on your employer-based health insurance for up to 36 months. You also missed your Special Enrollment Period (SEP), or the limited window when you could buy new insurance.
You’re confident that you can land a new job soon, but you don’t want to have a lapse in health insurance coverage. So you decide to apply for short term medical insurance. That’s a type of limited-duration health insurance that’s available for up to 12 months (less one day), depending on the state you live in.
But when you start reading the brochure, it mentions something about “medical underwriting.” If you don’t understand what that means, keep reading. We’ll explain what medical underwriting is and how it can affect your coverage.
You don’t have to wait for the annual Affordable Care Act (ACA) Open Enrollment Period to apply for short term medical insurance. In many cases, your plan can be in effect as early as the next day. Find out how.
What is medical underwriting?
Medical underwriting is a process that’s sometimes used by insurance companies. It’s a way in which they evaluate your health status when you’re applying for certain insurance coverage. Most of the time, they use it when you’re applying for health insurance or life insurance, says David Walls. He’s a licensed insurance agent who has extensive knowledge in Medicare and life insurance coverage in Dunnellon, Florida. They’ll use it to determine whether to offer you health insurance, and at what price.
Medical underwriting has become less common since 2014. That’s when an important rule went into effect under the ACA. The rule says that, generally speaking, health insurance companies can’t do medical underwriting anymore for qualified health insurance plans. (Those are plans that meet the protections and coverage standards set in place by the ACA.) They also can’t use it to reject you or charge you higher monthly bills (premiums) if you have a preexisting condition, such as cancer or type 2 diabetes.
But medical underwriting can still be used in certain situations. Here’s what you need to know.
Which insurance plans still use medical underwriting?
Some insurance companies still use medical underwriting. It’s mainly used for certain types of coverage not regulated by the Department of Health and Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS). These include:
Medicare Supplement Insurance (Medigap). If you purchase a Medigap policy to fill gaps in your coverage outside of your Medigap Open Enrollment Period, you’ll usually have to undergo medical underwriting, says Adria Gross. She’s the CEO of MedWise Insurance Advocacy in Monroe, New York.
“Medicare Supplemental insurers will look at all of your past [health] history to decide whether they will provide you with coverage,” she says. Medigap is insurance coverage to help pay your share of out-of-pocket costs in Original Medicare.
If you enroll in Original Medicare as soon as you turn 65, you get a 6-month Medigap Open Enrollment Period. During this time, you can enroll in any Medigap policy, and companies can’t use medical underwriting to decide whether to accept your application. This means you can’t be denied coverage if you have a preexisting condition.
Self-insured group health insurance. This is a type of plan you might get if you work for a larger company. The employer will collect your monthly insurance bill and pay your medical claims. They may contract with an insurance service for things like:
Or they may administer all of the above on their own.
But many of these plans perform medical underwriting annually. “Employees need to go for blood work and be weighed in at specific labs,” says Gross. “The decisions about the annual premiums are decided by not just their weight and health conditions, but all family members who will be insured on the employee policy.”
Life insurance. If you apply for either term life or whole life insurance, you’ll most likely have to go through medical underwriting. If you are in poor health and/or have multiple health conditions, you may be able to get a “guaranteed issue” life insurance plan without underwriting, notes Walls. These policies are small — generally $5,000 to $10,000 — and tend to be more expensive than a fully underwritten product. “They’ll help pay for a funeral, but you don’t get much bang for your buck,” says Walls.
Short term medical insurance. As was noted above, short term medical insurance plans provide health insurance that can last up to 12 months (less 1 day) in most states. These tend to have lower premiums than long-term plan options. The catch is that they require medical underwriting and can deny you coverage for certain preexisting conditions. This makes them a better option if you’re young and in good health. If you have a complex medical condition, it’s possible your application won’t be accepted.
Short term medical insurance may provide coverage for doctor’s office visits, prescriptions, hospital stays and more. Find out more about this healthcare coverage now.
What do medical underwriters look for in your health record?
If you undergo medical underwriting, you can expect to fill out a health questionnaire. You may be asked to release medical records, including:
Plus, you may have to tell them about any other medical care you’ve received in the last several years. In addition, underwriters often ask the following questions, notes Walls:
- Have you been diagnosed with any heart disease, including angina (chest pain), heart attack or cardiomyopathy (enlarged heart), or had any type of heart or circulatory surgery?
- Have you had a stroke or ministroke?
- Have you ever had a brain tumor or aneurysm? (That’s a bulge in a blood vessel in the brain.)
- Have you ever tested positive for HIV?
- Have you ever been diagnosed with cancer?
If it seems like a lot of questions, it is. “The main thing the underwriters are looking for with life insurance is to make sure that you don’t have a higher chance of dying within the next couple of years,” says Walls. “With health products, like a Medicare Supplement, they are wanting to make sure you won’t have any unusually large claims within the next couple of years.”
Keep in mind that any plan that requires medical underwriting can reject you, or charge you a higher monthly bill, if you have a preexisting condition.
COBRA can be expensive — especially if you lose your job. Find out why short term medical insurance could be an option , or contact a licensed insurance agent at 1-844-211-7730 for more information.
For informational purposes only. This information is compiled by UnitedHealthcare and does not diagnose problems or recommend specific treatment. Services and medical technologies referenced herein may not be covered under your plan. Please consult directly with your primary care physician if you need medical advice.
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50551-X-0226
