MEDICAL UNDERWRITING
Back to GlossaryDefinition
Using health information to decide whether to offer coverage and at what price; generally prohibited for ACA-compliant major medical plans.
Summary
Medical underwriting is the process where insurance companies evaluate an applicant's health status, medical history, and risk factors to determine whether to provide coverage and how much to charge for premiums. Before the Affordable Care Act (ACA), insurers could deny coverage or charge higher rates based on pre-existing conditions, age, gender, or health status. However, ACA-compliant major medical plans are now prohibited from using medical underwriting for most coverage decisions, meaning they cannot deny coverage or charge more based on health status.
Usage Context
This term is crucial when studying healthcare policy, insurance market reforms, and the impact of the Affordable Care Act. It's particularly important for understanding how insurance markets functioned before and after healthcare reform legislation.
Common Confusions
- Thinking that all insurance plans are prohibited from using medical underwriting
- Confusing medical underwriting with claims processing or prior authorization
- Believing that the ACA completely eliminated all forms of health-based pricing
- Not understanding that short-term or supplemental plans may still use medical underwriting
