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Underwriting Tip (Individual & Family California)

I wanted to address an issue with regard to underwriting for individual and family health insurance plans in California. A little tip to help you determine what plan rates to target and whether or not you would be considered for coverage.

Ignoring for a moment any health conditions that are ongoing (these are dealt with separately), we need to talk about your Rx and how it affects underwriting.

Here is a simple formula for you:

Take you monthly retail brand Rx costs and multiply them by four.

This is the minimum premium amount that you would need to target before a carrier would even consider underwriting your case.

So, let's say you have the following brand drug costs per month (you can go to drugstore dot com and get average retail pricing):

1 brand drug at $131.00
1 brand drug at $97.00
Total brand = $227.00
Minimum target premium = $908.00 (4x brand drug cost)

That means that the approximate minimum premium rate that a carrier might consider to underwrite would be over $900 per month. If you choose a $120 per month plan, since the maximum rate increase on PPO plans (there is no rate up on California HMO plans) is 2x standard premium, you would be declined for coverage right off of the application since the max rate for that plan would be $240.00 at the top rate-up.

If you can't find any PPO plan in the carrier's options that costs at least 1/2 of $908 ($454), then there is no point in even applying for coverage.

Remember this is a tip regarding Rx usage. And be aware that carriers check through services like Intelliscripts to verify every fill you've had for any Rx over the last few years. If there are further health conditions beyond the Rx, even if you can find a plan that meets this basic rule, you might (and probably will) still be declined for coverage.


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