Health Insurance Articles

Changes In Health Insurance Law That Protect Buyers

2010-11-22

The recent changes to health insurance law protect insurance buyers. These changes make it easier for individuals to purchase policies and, eventually, will make it possible for individuals to purchase policies at a lower rate. Below is an explanation of how the recent changes to health insurance laws affect purchasing health insurance.

Individuals familiar with purchasing an individual health insurance policy know that it is not as simple as merely selecting a plan. Historically, in addition to an application, insurance buyers were required to provide an extensive medical history. The purpose of this was so that the insurance company could decide whether they wanted the applicant as a client. It was possible to be rejected by a health insurance company. In fact, rejection was such a common occurrence that many insurance buyers would simultaneously apply to many companies in hopes of receiving at least one acceptance.

New laws, however, make it illegal for an insurance company to reject an applicant. This means that upon receiving an application, the insurance company cannot deny an insurance buyer's request for coverage based on previous medical health history. Health insurance companies, therefore, are required to accept any and all applicants that come their way. Insurance buyers, therefore, no longer have to worry about being stuck with no insurance, despite a willingness and ability to purchase and pay for such coverage.

Similarly, health insurance buyers no longer have to worry about pre-existing conditions. These conditions could have prevented individuals from purchasing coverage or from receive benefits under a policy for a condition the insurance company believed existed before the policy start date. In the latter situation, insurance buyers could have found themselves liable for a large portion of their medical bills.

The new health insurance laws eliminate pre-existing conditions as a legal basis for denial of a claim or insurance application. Insurance buyers do not need to worry about being an application being rejected because of previous medical conditions or about their insurance company denying a claim on a technicality even though it is covered by the policy.

Insurance buyers will also soon have the choice of joining a group health plan comprised. Group policies are cheaper and often provide more extensive coverage, but are only offered to persons or businesses containing a minimum number of people. The new health insurance law establishes groups out of individuals: by combining many people together, a group policy becomes available. This option, however, is not currently in effect.

The changes in health insurance law are designed to protect individual insurance buyers. The goal of these laws is to make coverage more available and more affordable to the people who may be otherwise unable to obtain insurance.