Reasons a Health Insurance Company Would Decline Coverage

Health insurance companies decline coverage for a variety of reasons. If you have been declined for health insurance coverage, or you believe you will be declined, you may need to join a group plan with guaranteed acceptance. In many states, insurance companies are required by law to issue policies to employee or association groups larger than a certain number of people, provided a large enough percentage of those people enroll. Outside of the group market, however, health insurance companies underwrite applications individually, and may turn down people with certain conditions.

Medical History

• Adverse medical history is by far the most frequently used criteria insurance companies use to decline coverage. Insurance companies don't just rely on your own reporting on the application -- they also have access to Medical Information Bureau data, a kind of medical credit bureau that collects medical information from physician's reports to prevent insurance fraud. Some medical conditions result in higher premiums, and some conditions frequently result in automatic declines, unless the applicant qualifies for a bar to preexisting condition exclusion by federal or state law.

Build

• Nearly every company will discriminate based on your height and weight. They frequently use your Body Mass Index (BMI) as a shorthand. Some individuals, such as bodybuilders and professional athletes, have very high BMIs, despite being in excellent health with very low body fat percentages. If this is the case with you, you may want to have your agent write a letter to the underwriter explaining a high BMI.

Morals and Behavior

• Some companies may decline otherwise healthy people, or charge a higher premium to people with a history of drunk driving, drug abuse or a criminal record.

Poor Credit

• Some companies will decline coverage based on poor credit or a history of bankruptcy. This is because it costs money to issue a health insurance policy. If the insurance company believes you will lapse the policy for nonpayment before it is able to recoup its costs in commissions, medical exams, Medical Information Board requests and administration, it may decline a policy on an otherwise healthy individual.

Professions and Hobbies

• Many companies will decline coverage based on dangerous professions and hobbies, such as rodeo riding, SCUBA diving, hang gliding, motorcycle racing or drag racing.