Coverage Denied: How the Current Health Insurance System Leaves Millions Behind

Coverage Denied: How the Current Health Insurance System Leaves Millions Behind

A large proportion of Americans have health conditions that insurance companies can qualify as “pre-existing conditions.”

A pre-existing condition is a medical condition that existed before someone applies for or enrolls in a new health insurance policy. It can be something as prevalent as heart disease – which affects one in three adults¹ – or something as life-changing as cancer, which affects 11 million Americans.²

But a pre-existing condition does not have to be a serious disease like cancer or heart disease. Even relatively minor conditions like hay fever, asthma, or previous sports injuries can trigger high premiums or denials of coverage.³

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A recent national survey estimated that 12.6 million non-elderly adults⁵ – 36 percent of those who tried to purchase health insurance directly from an insurance company in the individual insurance market – were in fact discriminated against because of a pre-existing condition in the previous three years.⁶

In another survey, one in 10 people with cancer said they could not obtain health coverage, and six percent said they lost their coverage, because of being diagnosed with the disease.⁷

It is still legal in nine states for insurers to reject applicants who are survivors of domestic violence, citing the history of domestic violence as a pre-existing condition.⁸

Even when offering coverage, insurers can exclude whole categories of illnesses related to a pre-existing condition. For example, someone with a pre-existing condition of hay fever could have any respiratory system disease – such as bronchitis or pneumonia – excluded from coverage.⁹

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Coverage can also be revoked for all members of a family, even if only one family member failed to disclose a medical condition.¹⁰

A recent Congressional investigation into this practice found nearly 20,000 rescissions from three large insurers over five years, saving them $300 million in medical claims¹¹ – $300 million that instead had to come out of the pockets of people who thought they were insured, or became bad debt for health care providers.

At least one insurance company has been found to evaluate employee performance based in part on the amount of money an employee saved the company through rescissions.¹² Simply put, these insurance company employees are encouraged to revoke sick people’s health coverage.