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Help With Guaranteed Health Insurance

Some states require health insurance carriers to offer at least one guaranteed issue product, and an even smaller handful of states have made all health insurance products guaranteed issue. Both pros and cons exist for guaranteed issue medical policies, and if you have access to such products you should familiarize yourself with exactly what's involved in obtaining guaranteed issue coverage.

  1. Medical Underwriting

    • The vast majority of states permit insurance carriers to adjust the premium of your health insurance policy based on an analysis of your prior medical treatment, and the carrier's estimation of your future needs. Less healthy people will pay a higher premium for the same coverage to offset the insurance company's anticipated expenditures on behalf of that person. Conversely, healthier people pay lower monthly premiums because they are statistically less likely to utilize the bulk of their available benefits. Many guaranteed issue health insurance plans do not conduct medical underwriting as part of the application process.

    Cancellation of Coverage

    • Guaranteed issue health insurance policies cannot be canceled by the carrier, regardless of the number or size of claims submitted for your treatment. This rule alleviates potential concerns over policies being canceled by insurance companies because of expensive claims. Guaranteed issue policies can only be canceled by the carrier if you fail to pay premiums or are convicted of insurance fraud.

    Pre-Existing Conditions

    • Pre-existing condition limitations may still be present in guaranteed issue health insurance policies. Depending on the specific state laws and the provisions of the insurance plan, payment for treatment of ailments that were present prior to purchasing coverage can be denied until the policy has been active for a predetermined period of time, typically one year. An insurance company cannot decline an application for guaranteed issue health insurance, regardless of how much medical treatment you had in the past and are likely to have in the future.

    Downside

    • Since most guaranteed issue health insurance plans do not conduct medical underwriting and cannot deny coverage to even the most unhealthy people, the cost of this coverage is a potentially significant downside. Carriers are unaware of the status of your health and must therefore assume the worst case scenario and charge premiums relative to that assumption. Guaranteed issue health insurance plans are the most expensive.

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