Health Insurance Companies Discriminate Against People with Pre-existing Conditions
The current system allows health insurance companies to exclude individuals from coverage based on risk factors and pre-existing conditions. The extent to which a pre-existing condition determines the scope and cost of coverage depends on a broad range of factors such as:
- The type of health insurance plan
- The level of care needed for the pre-existing condition
- Health insurance history3
Due to the potential cost associated with a pre-existing condition, insurance companies often exclude or charge exorbitant rates to individuals with a pre-existing condition. This phenomenon is often referred to as cherry-picking.
As a result, many people forgo necessary health care due to cost. A survey conducted by the Commonwealth Fund found that 37% of individuals surveyed (many of whom had a chronic condition) skipped medications, did not see a doctor when sick, or did not obtain recommended care during the year due to cost. This percentage is significantly higher than any of the other six countries surveyed4 (see graph below).
While some victims of cherry-picking forgo some necessary health care, many others are forced to be uninsured or underinsured because they simply cannot afford to purchase the necessary health insurance. The number of individuals that are uninsured or underinsured continues to rise as a result of the increasing cost of health insurance.
3 Tips for getting insurance when you have a pre-existing condition, CNN health.com http://www.cnn.com/2009/HEALTH/05/14/preexisting.condition.insurance/index.html - Accessed Sept 4th, 2009
4 Schoen, C et al. Toward HigherPerformace Heath Systems: Adults' Healthcare Experiences in Seven Countries, 2007. Health Affairs. 26, no . 6 (2007)