What to Do When You’ve Been Rejected for Health Insurance

health insurance rejectionThe concept of health insurance rejection is not familiar to everyone. Many people are able to secure coverage without worry, but for others the feeling of being denied is all too familiar.

Unfortunately, individuals with pre-existing conditions know more than anyone the frustration of being rejected when applying for health insurance coverage. With changes at the industry level not likely to occur for another year, how can a person handle insurance rejection?

The Reality of Health Insurance Rejection

When in need of medical attention, there’s nothing worse than the feeling of being uninsured. According to the U.S. Census Bureau, more than 50 million people know this feeling to a tee.

While some are unable to purchase insurance because they cannot afford the cost without the help of an employer, others can afford coverage but are simply being rejected by the companies with which they apply due to pre-existing conditions.

According to the HealthPocket report, Health Insurance Application Rejection Rates Rising?, an astounding one-fifth of people seeking coverage are denied and pre-existing medical conditions tops the list of reasons for the denial.

A lesser-known reason that individuals are rejected for coverage is gender bias. In late 2011, Prevention magazine revealed the shocking fact that it is legal to deny women health insurance on the basis of gender in 37 states.

Additionally, 95 percent of health insurance companies that offer individual plans practice gender-related denials — or charge women more for coverage.

The reasoning for denying coverage to women via gender bias is similar to that of denying individuals with pre-existing conditions. Insurance companies believe they will use health care services more frequently, which will cost insurers more money.

To avoid the higher costs, companies either charge more or deny coverage altogether.

One resolution set to take place for women and those with pre-existing conditions is the Affordable Care Act, also known as health care reform, which will fully take effect in 2014. The law prohibits insurance companies from denying anyone coverage because of pre-existing conditions, gender or age.

Until that time, individuals who are subject to denial have to look for other ways to ensure they have access to the medical care they need.

Are Alternatives to Health Insurance Available if Rejected?

If you have been the victim of health insurance rejection, it may be tempting to fight the company until it decides to accept you. In some extreme cases of rejection, this has actually worked, particularly when the news media gets involved.

But under normal circumstances where a company is following its guidelines of rejection, many experts recommend simply seeking coverage from another insurance company until one accepts you.

While there are no outright alternatives to health insurance aside from paying out of pocket, there are some options one can consider to acquire coverage while reducing the likelihood of rejection.

One option is to go with a high-risk pool. These pools are available in 35 states and are designed to ensure anyone can acquire coverage, regardless of their physical condition.

Another similar option is the pre-existing condition insurance plan (PCIP), which was created under the health reform law as a way for individuals who are deemed uninsurable to obtain coverage while waiting for the law to take effect in 2014.

Both of these options are deemed high-cost options and are only recommended as last-resort choices if nothing else works.

Another way to go is to look into eligibility for government assistance. Medicaid is available for individuals with disabilities, as well as parents with lower incomes. The State Children’s Health Insurance Program (SCHIP) is an option for parents earning low and moderate incomes who want coverage for their children.

Some also suggest applying for a high-deductible medical plan because insurance companies are sometimes more lenient with applicants. These plans usually offer low-cost premiums, but require individuals to pay a high deductible before receiving care.

One benefit of the high-deductible medical plan is being able to open a health savings account. This type of account is designed to allow individuals to set money aside on a tax-free basis. Banks typically offer these accounts with high interest rates, which helps depositors save more money quickly.

It’s tough to think that a person can be rejected for health insurance coverage based on factors that are likely out of one’s control. But until 2014, rejection may still be a reality, which is why it’s important to be persistent in searching for coverage until it is finally secured.