Individual Insurance Market Rules in California
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- Can insurance companies deny me coverage?
Insurance companies can deny you coverage in California. Insurance companies are not required to sell coverage to everyone who applies. That means they can deny you coverage because of anything they find objectionable in your health history. However, in California, individual market insurance companies must sell a standardized policy to anyone who has used up all their high-risk pool coverage (which lasts 36 months).
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- Can insurance companies charge me more than other people for the same policy?
Insurance companies can charge you more than other people for the same policy in California. If an insurance company chooses to sell you a policy it can charge you more for the same policy if it believes you pose a higher risk of costing it money, including if you have a pre-existing condition, are older, or are a woman of childbearing age. However, in California, if you buy an individual insurance market standardized policy because you have used up all your high-risk pool coverage, the company cannot charge you more than 110% of the standard rate in the state.
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- Can insurance companies exclude coverage of my pre-existing condition?
Insurance companies cannot permanently exclude coverage of your pre-existing condition in California. Insurance companies cannot permanently exclude from coverage any health problems you disclose, or they find in your medical records, at the time of application by an amendment to the individual health insurance contract (called an “elimination rider”).
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- Can insurance companies make up their own definition of a pre-existing condition?
Insurance companies cannot make up their own definition of a pre-existing condition in California. Insurance companies can only consider something a pre-existing condition if the person actually received medical advice, diagnosis, care or treatment for that condition prior to enrollment in the plan. This is called an “objective standard.”
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- Can insurance companies accept my application for coverage and later search my medical records for an excuse to deny me coverage for needed care?
Insurance companies can accept your application for coverage and later search your medical records for an excuse to deny you coverage for needed care in California. If you make a claim for health care services during the first 12 months (one year) of coverage, the insurance company can search your medical history dating back 12 months (one year) prior to the purchase of your policy looking for evidence that your current health problem was pre-existing. If the insurance company finds any such evidence, it can deny you coverage for that condition.
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- Can insurance companies pay their doctors incentives to provide me with less care?
Insurance companies cannot pay their doctors incentives to provide you with less care in California. An insurance company cannot pay health care providers incentives to withhold covered care.
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- Can I appeal an insurance company’s denial of care to an outside entity?
You can appeal an insurance company’s denial of care to an outside entity if you are in any health plan in California. If you are a member of any type of health plan you can file an appeal if the plan denied you a medical service saying it was not medically necessary. You can appeal to the Department of Managed Health Care and the Department of Insurance. The appeal is free and must be filed within six months of a denial of service from your health plan or delayed response to your appeal.
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- Can I sue my insurance company if it denies medically necessary care that causes me or a loved-one harm?
You can sue your insurance company if it denies medically necessary care that causes you or a loved-one harm in California. You can sue an insurance company for harm that may have resulted from its denial of coverage or benefits.
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SOURCE: Kaiser Family Foundation State Health Facts, 2007
To learn about all your rights and protections in the individual insurance market, contact the California Department of Insurance.
