Daily News Updates - Health Insurance News

Kick ‘en Again, Post-Underwrite Him, Pt.3 – What is ‘post-underwriting’?

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So ‘post-underwriting’ is a process where a health insurance provider will perform very “little or no underwriting/investigation during the application process.” Then, after the health insurance policy is sold defining what the coverages will be, the policy holder files an expensive claim. “With an eye toward avoiding payment of the claim,” they will then perform extensive underwriting investigations after a claim has been submitted to them. If they discover an omission of ‘misrepresentation’ they will deny the claim and sometimes even rescind the whole health insurance policy. The same effect holds for auto insurance, where a company will decide to ‘fault’ their own client because the ‘no-fault’ payment turns out to be cheaper than a ‘comprehensive’ payment/collection would be. These practices are becoming “more widely exposed” and, as a result, are becoming more “derided as unfair and impermissible” with state-mandated protections.

By engaging in ‘post-underwriting’, these health insurance providers are cutting out the time and costs of the investigations until needed. Often times they never are needed. Underwriting investigations are both time-intensive and expensive. They require things like “requesting, paying for and reviewing medical records, acquiring medical examinations,” and added administrative maintenance. So, to skirt this ‘overhead’ all they do is to scan a relatively simple application and ask a few questions concerning present health and medical history. With this, they then perform a cursory risk analysis and offer the health insurance policy. They never go so far as to actually review the medical records. The information used to create the policy comes from ordinary people who know little of the medical jargon and even less of what their medical records reveal or suggest.

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