Health Insurance Navigator

By Lisa Zamosky

A new report by the health plan comparison website, HealthPocket.com, highlights how serious a problem we have in this country with insurers rejecting applicants trying to buy an individual health insurance plan.

According to the report, which involves an analysis of more than 9,000 health plans nationwide, the health insurance industry averages a rate of decline of about 22%. That means, on average, every one in five people who attempts to buy a health insurance policy is turned away.

The numbers become more staggering when you look closely at particular markets around the country. For example, in a handful of states consumers are being rejected when applying for health insurance at about twice the national average:

• Montana – 45%
• Alabama – 40%
• District of Columbia – 37%
• Arkansas – 35%
• Alaska  – 34%

The report also breaks down the rates of rejection by insurer, with some declining applications at a rate of more than 70%.  The same insurance company also varies widely in its rates from one market to another.  For example, Kaiser Permanente plans in Georgia have a 34% rejection rate, while the same company in Hawaii declines applicants at a rate of 22%.

Looking by state and insurer, there are five insurance companies with the highest declination rates within the plans HealthPocket.com reviewed. All of them are part of the Assurant Health group of companies.

• John Alden Life Insurance Company (South Dakota): 73%
• Assurant Health (Utah): 71%
• Assurant Health (North Dakota): 58%
• Time Insurance Company (Kentucky): 56%
• Assurant Health (Idaho): 56%

The problem with rejection

Beyond the frustration of being denied an insurance policy, not to mention the frightening position being uninsured puts people in when they need medical care, there are other concerns you should have about being turned down when applying for a policy.

Here’s what the report says about the danger of being declined:

“Experts say that health insurance declination rates are a serious issue for consumers, with hundreds of thousands of people being rejected for coverage each year. A health insurance application rejection from one company can negatively affect applications from other companies since insurers typically ask about previous denials when evaluating an application.”

Help is on the way

One of the primary benefits of the Affordable Care Act is its promise to make health insurance available to everyone who applies for coverage. Starting January 1, 2014, insurers must accept all-comers who apply for a health plan; no one can be turned away for a pre-existing health condition or any other reason.

If you’ve been declined for a health plan once, don’t give up. Seek the help of an experienced insurance agent in your area. As the report demonstrates, the same health plan can have different rates of rejection depending upon the market. A good agent knows his or her market well and the insurance companies with which you’re most likely to have success based on your particular situation.

You can find an agent near you by logging onto the website of the National Association of Health Underwriters.

Have you been turned down when applying for health insurance? Share your story here.