Arizona Health Insurance > Medical Underwriting Process

Medical underwriting is an insurance term referring to the use of medical or health status information in the evaluation of an applicant for coverage . As part of the underwriting process, health information may be used in making two related decisions: whether to offer or deny coverage; and what premium rate to set for the policy. The use of medical underwriting may be restricted by law in certain insurance markets. Where allowed, the criteria used should be objective, clearly related to the likely cost of providing coverage, practical to administer, consistent with applicable law, and designed to protect the long-term viability of the insurance system.

The use of medical underwriting in the individual health insurance market has met with some controversy. While medical underwriting is designed to keep premiums as low as possible, critics say that the practice prevents some people with relatively minor and treatable pre-existing conditions from obtaining health insurance. Some states have outlawed medical underwriting as a condition for obtaining insurance; these states generally have the highest average premiums for individual insurance

Purpose

From the insurers' point of view, medical underwriting is necessary to prevent people from purchasing health insurance coverage only when they are sick, pregnant or need medical care. This tendency is called "adverse selection," i.e, a system which attracts high utilization users while discouraging low utilizers from participating. Proponents of underwriting believe that, if given the ability to purchase coverage without regard for pre-existing medical conditions (i.e., no underwriting), people would wait to purchase health insurance until they got sick or needed medical care. Waiting to obtain health insurance coverage until one needs coverage then creates a pool of insureds with "high utilization," which then increases the premiums that insurance companies must charge in order to pay for the claims incurred. In turn, high premiums further discourage healthy people from obtaining coverage — particularly when they realize that they will be able obtain coverage when they need medical care.

What does it all Mean?

Any quotes generated by this web site are estimated.  Once you complete an application for medical coverage from one of the companies that we represent, the information contained in the application will be reviewed by a Medical Underwriter which will then decide whether they are going to offer insurance coverage as applied for (with no increase in premiums and no riders attached).  There is also a possibility that your application may be declined.  Coverage is not guaranteed by any company, so please do not cancel your current insurance until you have been accepted.