How Do Insurance Companies Find Out About Pre-Existing Conditions?

Health plan participants often wonder how insurance companies obtain information related to their current and past health status. Plan participants must provide a detailed list of any pre-existing health conditions on the insurance application. But some applicants misrepresent facts about their health and omit pertinent information. Insurance companies find out about pre-existing conditions by requesting and researching the applicant's medical records.

Medical Questionnaire

• Insurance companies administer a health questionnaire to applicants to find out about pre-existing conditions. Companies use a standard health questionnaire to determine if an applicant is eligible for coverage based on current and past health status. The questionnaire asks that you identify health conditions you currently suffer from or have suffered from in the past. The questionnaire also requests information regarding symptoms you currently experience.

Medical Information Bureau

• The Medical Information Bureau (MIB) is a service that helps insurance companies find out about pre-existing conditions. When an insurance company receives an application from an someone with a risky health condition, the company submits the information to the MIB for review. Medical Information Bureau records include medical information that could affect insurability, such as blood pressure, laboratory test results, heart test readings and height and weight records. The MIB also reports non-medical information such as participation in hazardous activities and unfavorable driving records.

Risk Assessment

• Insurance companies assess the risk of prospective policy-holders through underwriting. During the underwriting process, insurers uncover all aspects of the applicant's health that could potentially increase risk for the company. For example, insurance underwriters evaluate data such as age, height, weight, hobbies and lifestyle habits such as smoking and drinking. These factors could uncover underlying medical conditions such as obesity or high blood pressure. Underwriters also evaluate family medical history to determine if the applicant has family history of illness or disease.

Significance

• Insurance companies must know about pre-existing conditions to properly rate applicants. Policy-holders should pay insurance premiums based on the amount of risk the company assumes for insuring them. For example, an insurance company assumes more risk insuring a 60-year-old male with a history of heart problems than insuring a 25-year-old female in perfect health. If an insurance company does not know about pre-existing conditions, it cannot charge the applicant the appropriate premium. In the long run, other consumers who purchase insurance end up paying much more to make up the difference.