YOU ASK:

Can health insurance companies drop you due to a change in health?

WE ANSWER:

By September 2010, insurance companies may not drop you just because you got sick. These are for all policies that are issued after that time. This means that people are assured of coverage even when there is a change in their health. The same goes for your children - they can't be denied coverage just because they have a pre-existing condition.

This is currently a prevalent problem, particularly with those who are covered through the individual health insurance market. The common practice is for insurance companies to drop your policy after you have made a claim on your insurance during the term of the policy.

For now, insurance companies are able to cancel your policy due to your health condition. But, they will not be allowed to do so with the regulations laid down by the health care reform bill. Insurance companies can only cancel your policy if it is proven that you have committed an act of fraud or misrepresented some key facts about your health or about your claim.

This is just one of the consumer protections that have been put into place by the healthcare reform bill. Other consumer protections include:

  • Ensuring that your premium dollars mostly go to medical expenses and not on the insurance company's admin expenses.
  • Banning of lifetime limits. Also on September 2010, there will be no lifetime limits on health insurance. You see, insurance policies usually have a lifetime limit for a specified illness. Once that limit is reached, the policy will no longer pay for any treatments or expenses related to that illness. This will be disallowed and rather than having lifetime limits, there will only be annual benefit limits.
  • Prohibiting insurance companies from denying coverage due to pre-existing conditions. You and your children will be assured of health insurance coverage since insurance companies are obligated to provide you with the coverage you need.
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