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Underwriting

Today’s topic is the underwriting process for private health insurance plans. This concept can be new for Americans that have always had insurance with their employers, so I hope this helps! Let’s dive in!


Private insurance companies can offer customers fully catastrophic plans (maximum out of pocket plans) ONLY if they qualify based on their health. The rates for private insurance are generally about 20-40% more affordable than the Obamacare/Cobra plans. This is largely due to the fact people approved on private generally have smaller claims for the year. When the insurance company pays out less for their customers claims, it allows the company to offer even more affordable rates!


What information does the insurance company gather to make this decision? The two documents that the insurance company uses are a “MIB” (medical information bureau report) and a prescription profile. Both documents are like a report card for when you go to the doctor. The MIB and prescription profile allow the insurance company to determine which individuals are best fit for their insurance plans. Most of the time, the insurance will approve or decline after reviewing these documents. However, sometimes they will request to further review your medical records on a case-by-case basis.


The process for underwriting can seem invasive and time consuming, but the importance of underwriting cannot be stressed enough. 93% of insureds on these plans have claims less than $5K for the year! Private insurance companies need to have an accurate underwriting process to prevent the rates from mirroring the Obamacare/Cobra plans. An underwriting decision can be made as soon as 2 hours after applying, but it can take up to a month if a hospital takes a while to provide medical records.


A lot of information was covered in this post, so I hope this helps. If you have any specific questions or need clarification, as always feel free to reach out. Have a blessed rest of your day and make 2022 the best year yet!


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