For some time now, health insurance companies have been following a somewhat non-apparent rule. If clients who lie or commit fraud when applying for health insurance become ill for a specific reason, their plans can be canceled without warning. This leaves the ill or pregnant patient stuck with a pile of medical bills. This has been an accepted practice by insurance companies as a way to cut costs and minimize fraud.

            Now, I will agree with the insurance companies on one aspect of this. If a person knowingly lies when applying for coverage, they should not receive complete coverage from that carrier. It is up to the individual to be honest and submit all relevant information. But I do not agree with the complete cancellation of the policy. Perhaps, these individuals can receive a fine and a rate-up of their policy. This has been a great problem with our country, many people who seek health insurance are being denied due to prior conditions.

            States like Maine, Massachusetts, New Jersey, New York, and Vermont guarantee health insurance coverage. The guarantee of health insurance throughout these state’s drive up costs for individuals. This creates an even greater problem for these states. Since each individual is guaranteed a health insurance policy, prices need to be very high to cover the costs of high risk insurers. This means that a 25 year old male or female who is extremely healthy will still have high rates to cover those who are unhealthy.

            Health insurance coverage for a low risk individual becomes high when states have “guaranteed issue” for health coverage. In one perspective, this is bad for most people throughout the state because individuals are stuck with extremely high rates. In the opposite perspective, this is great because you are guaranteed a health insurance policy no matter what your medical history is. You can imagine the problems this creates for California Health Insurance companies when citizens become upset by their cancelled plans. The insurance companies are viewed as the enemy even though they are just protecting the rates of their other clients. Which ever way you view it; these insurers are simply trying to control the cost of healthcare while protecting the interests of the stock holders. After all, health insurance companies are businesses and their interests lie within the stock holders.