Insurers Deny Coverage Based on Occupation, Medication Use
Some health insurers in California refuse to sell individual health insurance policies to people in high-risk occupations or to those who use certain prescription medications, according to the confidential underwriting guidelines of four health plans, the Los Angeles Times reports.
The guidelines obtained by the Times -- for health insurers Blue Cross of California, Blue Shield of California, PacifiCare Health Systems and Health Net -- are used by health plan sales agents to determine coverage eligibility.
According to the Times, all of the insurers except Blue Cross of California deny individual coverage based on occupation. All four insurers deny or limit coverage on the basis of prescription drug use. Such restrictions are legal in California, and the health insurers maintain that the restrictions are necessary to keep premiums down.
According to Davis Olson, a spokesperson for Health Net, "This is something that has been actuarially determined to keep insurance affordable for a very, very broad range of people." However, some consumer advocates say the policies are too restrictive.
The companies' guidelines feature detailed tables outlining whether to accept, accept with a premium surcharge or decline insurance applicants for a number of conditions, the severity of existing conditions and other factors, such as height and weight. In some cases, individuals are denied coverage because a drug they are using costs more than the premium an insurer charges for the coverage.
Eight of the 20 top-selling prescription drugs in the U.S. -- including the No. 1 drug Lipitor, an anticholesterol medication -- are included on two of the health plans' lists. California lawmakers are considering ways to expand coverage to uninsured state residents, including a plan supported by California Gov. Arnold Schwarzenegger (R) to mandate health insurance coverage.
Those familiar with the governor's plan say Schwarzenegger seems to understand that mandating coverage would not be feasible if insurers are able to deny coverage for all but the healthiest residents. In addition, Blue Shield of California officials have said they believe the underwriting process should be eliminated and all insurers in the state should share the risk (Girion, Los Angeles Times, 1/8).