California health insurance companies must abide by numerous laws that require them to provide certain services in plans, as well as decline certain people for coverage. These laws are changing as health reform sets in, however, the state insurers still have the right to turn down many applicants for coverage. Especially those who have preexisting medical conditions or chronic illnesses will have difficulty obtaining coverage on the individual market in California until 2014. Those who have access to health benefits through an employer cannot be declined for their illness, and COBRA and continuation benefits can also not discriminate against anyone for their health.
Individual health insurers in California have the ability to increase a person’s premium rates or reject them entirely until the federal law changes. The underwriting process will determine your eligibility for that particular health plan, and is the deciding factor whether or not your rates go up for a condition, or you are declined. Insurers must also provide a legitimate cause for their decisions, such as an applicant having high blood pressure and taking three medications.
California policyholders have their own rights, as well. A health plan may be responsible for accepting or rejecting someone, though they cannot decline coverage for reasons other than your medical history. This, too, will be eliminated soon, and plans will be offered to all Californians, with rate ups only for age and tobacco use. Currently, California insurers can increase rates for health conditions only, as the state is one of few that prices premiums identically for both men and women.
Current Laws in California
Health plans in California also cannot do post-claims underwriting, meaning that an insurer must be thorough and detailed when asking an applicant about their medical history and reading their information prior to approval. Therefore, if a person applies and has been honest about their health, then is diagnosed with a condition after their coverage starts, the policy cannot be re-underwritten, or increase the premium due to risk. The health plan is unable to cancel or rescind your coverage in the event that this occurs. Unless you have not been honest about your medical history on your application, your plan is protected by state and federal law. Your health plan can also cancel your coverage if you do not pay your premiums.
Californians with medical conditions who are not approved for individual coverage have access to one of two health insurance programs as an alternative. MRMIP is California’s high risk pool, offering health plans to those who have been declined by a private insurer for their health. PCIP is the federal risk pool, accepting individuals with preexisting conditions who have been uninsured for at least six months. Either of these plans are an adequate solution for adults who are unable to buy their own health plans, as neither will rate up for health conditions. All insurers have different underwriting guidelines and their criteria for conditions is also specific to the company. Aetna is known for accepting many types of conditions that other carriers reject.
There are, however, many conditions deemed automatically declinable by most insurers. These include health problems you have not addressed with a doctor, a doctor has difficulty identifying or treating, or a specific condition. Examples of typically declined conditions include the following.
- Cancer (in treatment)
- Current infertility treatment
- Diabetes with complications
- Heart disease
- History of transplant
- Multiple Sclerosis
- Muscular Dystrophy
- Pregnancy, pregnancy of your spouse or significant other, planned surrogacy or adoption in process
- Renal failure or Kidney Dialysis
- Severe mental disorders, such as major depression, bipolar disorder, schizophrenia or psychopathic personalities
- Sleep Apnea
- Systemic Lupus Erythematous
California health insurers will also increase rates for many specific conditions, but these are also heavily subject to the underwriting guidelines of each insurer. Usually, however, this includes health problems a person is currently dealing with or was diagnosed with in the recent past. The state look-back period for conditions is 12 months. Insurers also may accept an individual with a condition, rate them up, and also issue an exclusion period. These can last for up to six months, leaving members to pay out of pocket for their specific condition. Examples of conditions for which insurers increase rates are:
- Allergies, while testing is in process
- Breast implants (non-silicone)
- Ear infections, controlled with medications
- Joint sprain or strain, recovered and no restrictions
- Lyme’s disease, without symptoms after one year
- Migraine headache, mild and infrequent with no emergency room visits
- Mild depression
- Stroke, after 10 years with no reoccurring problems
Another important aspect of health insurance underwriting is Body Mass Index (BMI), or weight to height ratio. Health plans usually do not accept an applicant with a BMI over 39. Individuals with BMI between 30 and 39 are typically rated up due to the health risks their weight may cause. Those who have already experienced weight related health problems such as high blood pressure, diabetes, and gastric bypass surgery will likely be declined. Determine your BMI with an online BMI calculator.
Health plans in California also look at a new applicant’s history of alcohol, drug and tobacco use to decide if they are at risk for medical problems. Based on the frequency of your habits, you may or may not be considered a risk to insure. Typically, insurers consider a smoker someone who has used tobacco at least once in the past year.
If you have had your health plan for a minimum of 18 months in California, you have the ability to switch to a new plan contract under the same carrier. As long as the new plan has benefits less than or equal to the ones your current plan offers, you may be able to change if the insurer offers the option. For instance, if you want a higher deductible plan, you can purchase one with similar benefits to your current plan. Your plan will be transferred without the need for a new underwriting process to take place, and you can do so more than once in a year. The insurer will send you information regarding your right to transfer whenever the plan changes premium, and other details about your coverage and rights, such as whether or not you are able to return to your present contract after a transfer.
All health plans must provide a ranking of their individual plan contracts to detail which have similar benefits to one another. Insurers are required to update their rankings, either one their website or by mail, whenever the Department of Managed Health Care (DMHC) approves a new plan or benefit package. Certain policyholders do not have the right to transfer their plans, including those with HIPAA coverage, conversion plans, Medi-Cal or any other state program, or supplemental coverage such as dental and vision stand-alone plans.
California law states that health insurers are required to offer various services in their plans, including basic preventive and primary care, as well as those that apply to specific needs. However, the plans are only required to do so when it is considered medically necessary, hence all plan members having access to prevention. Basic services include doctor’s office visits for illness and injury, emergency care, and other care usually found in a standard health plan. Other services for specific conditions are also covered.
- Physician office visits
- Diagnostic, laboratory, and X-ray services
- Preventive care
- Mental health care
- Emergency and urgent care
- Rehabilitative services such as physical therapy
- Home health care or nursing facility after an inpatient stay
- Standing referrals for patients with AIDS
- Diabetes management and supplies
- Clinical trials for cancer
- Breast reconstruction or prosthetics for mastectomy
- Post-laryngectomy prosthetics
- Reconstructive surgery to correct or repair birth defects, developmental abnormalities, trauma or injury, infection, tumors, or disease
- Osteoporosis screening, diagnosis, and treatment
- Dental anesthesia
Appeals & Complaints
If you are dissatisfied with your health insurance company or plan, you have multiple ways to solve your problem. Primarily, you must speak directly with your insurer. Politely addressing your issue with an agent is the first step to filing a formal complaint, or understanding what has occurred. If your complaint is in regards to a denied claim, you must file an appeal. Many carriers include appeals forms on their website, and if not, it is best to request a form from an agent or through the member services section of their website.
Though this process may be sufficient to address your problem, other times you may feel unhappy with the insurer’s response. If you have not reached an agreement with your health plan that meets your expectations, review your benefits, and make sure you understand your plan. Then, if you feel your problem is urgent or has not been resolved, you may contact the DMHC for assistance. The DMHC considers a problem “urgent” if it seriously threatens your health. Contact the DMHC Help Center to help you with your complaint. Also, you may contact the Help Center if after 30 days, your plan has not responded. The Help Center can also provide an external review for those who qualify.
- In the event that you are unable to obtain necessary care, request a written explanation.
- Discuss this issue with your physician.
- Take notes during phone conversations with your health plan. Record the date of your call, the name of the agent you speak with, and what they tell you.
- Have someone with you for additional support.
- Take action immediately. Patients who wait over 6 months risk losing the right to file a complaint, request and Independent Medical Review (IMR), or take other action against your health plan.