HealthPocket Survey: Health Insurances Apps Rejected 22 Percent of the Time

 A recent industry analysis from HealthPocket has found that the application rejection rate for health insurance is at 22 percent nationally. The statistic includes applications submitted for individuals and families. The rejection rate was found to be much worse in some states than in others.

For example, Montana recorded the highest rejection rate at 45 percent, followed by Alabama (40 percent), Washington D.C. (37 percent), Arkansas (35 percent), and Alaska (34 percent). Declination rates at some insurers were also found to be more than 70 percent. For example, Kaiser Permanente Georgia has a declination rate of 34 percent while in Hawaii the same company has a declination rate of 22 percent.

“Clearly there is great variability across states and within states in terms of how frequently an insurer rejects a health insurance application, but nationally it seems to be occurring more frequently than industry analysts had assumed,” Kev Coleman, head of research and data at HealthPocket, said.

As of January 1, 2014, insurers will no longer be allowed to deny coverage, or charge higher premiums, based on gender or pre-existing conditions.

“What is unclear is whether some insurers have increased their declination rate in order to improve risk pool health and profitability prior to 2014, when [the pre-existing provision goes into effect],” Coleman said.

The plans with the highest declination rates were found to be: John Alden Life Insurance Company in South Dakota (73 percent), Assurant Health in Utah (71 percent), Assurant Health in North Dakota (58 percent), Time Insurance Company in Kentucky (56 percent), and Assurant Health in Idaho (56 percent). Overall, East Coast citizens have a better chance of being accepted for coverage as Maine, Massachusetts, New Jersey, New York, and Vermont measured zero percent declination rates.