When insurance companies revoke policies

Feb 5, 2007

Say what you will about the cost of insurance in New York State (and we've probably said it all): there's certainly some protection that comes with buying insurance in a guarantee-issue state. USA Today published a piece last week on individuals who've had their policies revoked for enrolling with erroneous information about their medical histories. Says the article: "Concern may grow as more people join the individual market, which now includes more than 16 million people nationwide. People buy individual policies because their employer doesn't offer health insurance — as is the case with about 39% of all employers; or because they retire before Medicare eligibility; or because they are self-employed, between jobs or jobless." Since there's no medical underwriting in New York--insurers can't deny applicants coverage based on their medical histories--the revocation of policies isn't the problem here that it is in, say, California. But the spike in lawsuits based on this practice is evidence of another trend: more and more people aren't getting insurance from an employer, and are instead entering the individual insurance market. Via InsureBlog, which casts a critical eye on USA Today_'s coverage._