Mansell, Engel & Cole

Ongoing insurance reality: coverage denial for preexisting condition

“We live in a time when even outlandish arguments can sometimes win the day.”

So says one health care expert commenting on what we suspect readers of our Oklahoma insurance law blog will deem a decidedly unfair coverage outcome.

What unexpectedly happened to one man who purchased health coverage occurred after he happily inked a policy that he regarded as both comprehensive and affordable.

That individual sought treatment for shortness of breath and was ultimately diagnosed with type 2 diabetes and heart failure. He incurred a $35,000 bill, which he duly submitted to his insurance company.

The insurer denied the claim, stating that the man’s problems stemmed from a preexisting condition. Even though the federal Affordable Care Act disallows policy denial based on that rationale, it does so only for major medical insurance plans. In the instant case, the policyholder’s coverage was purchased through a so-called “short-term limited duration” plan. The insurer spotlighted that in its denial.

The matter now garners national attention owing to the fact that the policyholder had no idea his coverage contained a preexisting-condition limitation. Entities that provide limited-plan coverage are required to fully disclose all applicable limits, and the denied claimant states that his provider was silent on that matter when offering the policy.

“Crafty sales pitches often gloss over those details,” states one media report.

And some bad-faith providers take “a second shot at denying coverage when a big bill comes in,” notes a principal with one national non-profit health care group. They do so by scouring a claimant’s medical history for evidence “that an issue has been brewing or even just that risk factors were present” when a policy was signed.

An insurer’s bad-faith tactics are both morally and legal indefensible. A claimant having questions or concerns tied to a provider’s behavior can reach out for guidance and diligent legal representation to a proven team of pro-policyholder insurance law attorneys.

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