How are Insurance Policies Rated?
Health insurance companies charge premiums for policies based on the known costs associated with health conditions, diseases, disabilities and past medical history. If your past medical history indicates you were treated for a high cost condition, your premium may increase.
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Significance
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If you have a pre-existing medical condition, you may be charged an additional premium to cover that condition. This is called rating. It is based on the insurance companies' previous experience with that condition.
Time Frame
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Some conditions improve over time, and after that time, insurance companies usually drop the rating, if you haven't required treatment for it. The time frame depends on the condition.
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Misconceptions
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Insurance companies rate policies because, from their experience, it costs more to insure people who have certain conditions such as diabetes or heart disease. They do not rate policies because they want to make more money or deny you coverage.
Considerations
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If you want to change your insurance, don't get an exam just prior to changing companies. If your doctor finds a condition that is ratable, such as pregnancy, you may not be able to switch without paying more money or you may not be covered for it at all.
Benefits
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The benefit of health insurance companies that will rate a policy is that if they didn't, they would otherwise not insure you at all.
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References
- Photo Credit surgeon image by Andrey Rakhmatullin from Fotolia.com
