Daily News Updates - Health Insurance News

Kick ‘en Again, Post-Underwrite Him, Pt.2 – What is ‘underwriting’?

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So what is this ‘post-claim underwriting’ all about? To best explain, it might be good to describe the ‘underwriting’ process. The business of offering health insurance is all about assessing and assigning financial risk to the providers. Prudently, this ‘underwriting’ is supposed to be done before issuing a policy. In order to accomplish this it is necessary to perform thorough investigations. Determinations are made as to the degree and nature of risks. In the case of a private health insurance policy, key factors will be a person’s current health, as well as, their medical history. This is the stage which normally precludes persons with pre-existing or terminal conditions, as well as chronic-claims filers. If not flat-out denied, these people will face extremely high health insurance premium rates because they are a ‘bad risk’.

With ‘underwriting’ explained, now it will be easier to comprehend the ‘post-claim underwriting’ problem. ‘Post-claim underwriting’ is where major deciding factors are carelessly not investigated until after a policy has been issued, brought and paid for before an expensive claim is filed. Doing this deliberately is not standard procedure in the health insurance industry and is, in fact, even illegal in some states. However, there are some ‘underwriters’ who do actively engage in this practice to sell more policies, with full intent to ‘change the rules during the game’ in order to reduce liability. If the proper investigation had been performed prior to selling the policy, the policy may never have been sold. So, with the express purpose of escaping claim payment, a health insurance company will look for ways to get out of it

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