Who Gets Denied?

Last week, the news about Alex Lange , a healthy 4-month old baby rejected for health insurance because he had a pre-existing condition of “obesity,” made us wonder what other reasons health insurance companies can turn you down for coverage if you by insurance on your own.  This week we learn that children, like Aislin Bates, are also being denied health insurance for being underweight.  It turns out there’s a long list of reasons people are denied coverage, and many are just as absurd as an “obese” 4-month old fed only breast milk.

The Texas Office of Public Insurance Counsel tracks the “underwriting guidelines” used by insurance companies, which are internal criteria insurers use to decide who gets approved for policies, who gets rejected, and how much you have to pay in the individual market.  All insurance companies in OPIC’s survey deny coverage to people based pre-existing health conditions and obesity, which is appalling, but not really surprising.  What’s surprising is the list of seemingly irrelevant things insurers also used to deny coverage in Texas.

-Most insurers use credit reports, a record of a person’s credit repayment history, to reject certain applicants.

-Most insurers use moral or lifestyle criteria, such as former convictions, multiple speeding tickets, and past drug use, to reject certain  applicants.

-All companies treat pregnancy as a pre-existing condition and almost all will reject pregnant applicants. But 33% of companies decline the entire family if one member is pregnant.

-38% of companies use the reputation of the applicant to deny coverage.  Companies gauge the applicant’s reputation by asking his/her insurance agent or in some cases, conducting interviews with friends, neighbors, and associates.

-10% of companies use impairments resulting from domestic violence as a basis for denying coverage.

-About half of companies use an applicant’s occupation or hobbies, such as SCUBA diving, sky diving, and rodeo, to deny coverage.

All of the health reform bills moving in Congress will prevent health insurance companies from denying coverage to applicants for any of the reasons above, which will be welcome news to people who have health conditions, are pregnant, have lots of speeding tickets on their record, or enjoy participating in amateur rodeos on the weekends.