SB 71

Preexisting condition exclusions

Under current law, an insurer may impose a preexisting condition exclusion for

up to two years under an individual health insurance policy. Under a group health

insurance policy, a preexisting condition exclusion generally may not exceed one

year. Additionally, under a group health insurance policy, an insurer is limited to

imposing a preexisting condition exclusion only with respect to conditions for which

an insured received treatment, or for which treatment was recommended, within six

months before the insured's coverage began. Under an individual health insurance

policy, an insurer is not limited with respect to how long before an insured's coverage

began a condition must have existed to be considered a preexisting condition for an

exclusion, and current law does not specify that the insured must have received

treatment, or that treatment must have been recommended, for the condition. Thus,

an insurer is free to impose a preexisting condition exclusion under an individual

health insurance policy for any condition that may have existed at any time during

the insured's lifetime that the insurer believes the insured should have known

existed or for which the insurer believes the insured should have sought treatment.

This bill provides that under an individual health insurance policy, an insurer may

impose a preexisting condition exclusion for up to one year for a condition for which

an insured received treatment, or for which treatment was recommended, within one

year before the insured's coverage began.

Modifications at renewal of individual health insurance

With some exceptions, an insurer must renew an individual health insurance

policy at the option of the insured. At renewal, the insurer may modify the policy

form on a uniform basis among all individuals with coverage under that policy form.

The bill requires an insurer, at renewal of an individual health insurance policy and

at the request of the insured, to modify the benefits or deductible level under the

policy, or to provide coverage under a different but comparable individual health

insurance policy offered by the insurer without subjecting any individual covered

under the policy to additional underwriting.

Uniform application for individual health insurance

The bill requires the commissioner of insurance to promulgate rules

prescribing uniform questions and the format for individual health insurance policy

applications, which may not be more than ten pages long. After the effective date of

the rules, all insurers offering individual health insurance policies must use the

prescribed questions and format on an application for such a policy.