What is moratorium?

Moratorium is a delay in something. Moratorium as it applies to affordable health insurance, refers to a delay in medical coverage if you have had a pre-existing condition.  This can be anything from back surgery to cancer.  So if you have had a pre-existing condition, and are shopping for health insurance, how will this affect you? It depends on what type of underwriting clause there is in your policy. There are the two basic types. Those in favor of medical underwriting say that doing it keeps the cost of insurance down for policyholders. Critics say that it prevents many people with non-life threatening conditions from getting health insurance.  While understandable denials of coverage for things such as cancer, heart disease, and arthritis, there have been reports of denial of coverage for things such as acne, being 20 or more pounds overweight, and past sports injuries.  It has been estimated that almost 5 million people are without medical coverage because of pre-existing conditions. So pay attention and ask questions if you think you have a pre-existing condition when applying for coverage. Here are the main two types of underwriting to understand when you go looking for affordable health insurance.

Types of underwriting clauses.

The first one is “Full Medical Underwriting.”  With full medical underwriting, a medical history application is filled out and assessed by the underwriters for risk. Three of the most common results are: the application is accepted without exclusions, the application is accepted with exclusions for pre-existing conditions, or the application is denied.  This is done on a case-by-case basis.  If it is found out later that you had a pre-existing condition that you did not list on your application, the policy normally has a “rescissions” clause, which comes into effect that terminates your coverage and/or your affordable health insurance policy. See also lower your costs.

The second one is called  “Moratorium Underwriting.” In this type of underwriting, no application needs to be filled out. A moratorium clause is put in that no coverage will be paid out for pre-existing conditions up to five years before the start of the policy. However, frequently that moratorium is lifted after a period of time like two consecutive years where you have had no symptoms from that condition. The wording can be tricky and very confusingly to understand, so you should always read this very carefully.  So this isn’t necessarily something that only applies to the very sick. Make sure you understand, ask questions and read your policy so you don’t have a moratorium put on your coverage. Experts in the industry are highly suggesting that you obtain a minimum of three free online quotes!