How Insurers Reject You

BlueCross BlueShield of Texas’ blueprint for denying health policies.

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It’s difficult to appreciate the stakes in health care reform if you receive health insurance through your employer. About 59 percent of Americans do, and while they are paying more and more for fewer and fewer benefits, in the larger scheme of things they’re the lucky ones. Although they could certainly use some help from Washington, Obamacare won’t give them much.

The people who most urgently need Congress to pass health care reform belong to a different group. They’re the 9 percent of Americans who purchase health care for themselves or their families in the so-called “nongroup market,” which is where most of the horror stories you’ve heard about health insurance tend to occur. On second thought, that’s not quite right. The people who most urgently need health reform are those who aspire to join the 9 percent, but can’t, either because no nongroup insurer will take them or because any nongroup insurer that will take them has priced its policy sky-high to offset some medical risk or another. Neither wealthy enough to pay for nongroup insurance nor poor enough to qualify for Medicaid, these spurned customers end up among the 15 percent of Americans who receive no health insurance at all. Should you lose your job and fail to find another, expect to purchase nongroup insurance or, worse, not purchase it. Together, these two groups represent one-quarter of the population.

A lot has been written about what health reform would do for this 25 percent. It would create a new marketplace (the “exchange”) to sell private health insurance to people who aren’t insured through their employer or the government. Insurance companies that sold through the exchange would not be allowed to reject customers based on pre-existing conditions, and their ability to charge different people different rates would be sharply reduced. Everyone would be required to have health insurance (to prevent customers from gaming the system by not purchasing insurance until they got sick), and to help make such purchases possible the government would offset some of the cost for most customers in the exchange.

How badly are these reforms needed? To find out, I read through a 2009 document that BlueCross BlueShield of Texas provided its agents to guide them about who may and may not purchase a policy, and on what terms. The underwriting guidelines are quite draconian, though not dramatically worse than others that have leaked out; similar documents are online for BlueCross BlueShield of Florida (2009), Health Net of California (2006), BlueShield of California (2006), BlueCross of California (2004), and Pacificare of California (2003). BlueCross BlueShield of Texas is of interest because it’s the largest health insurer in the state and because Texas has the nation’s highest percentage of people without health insurance (25 percent). Also, the document happened to get leaked to me. BCBSTX did not return my call asking for comment.

The first hurdle to clear concerns weight. BlueCross BlueShield of Texas isn’t too strict on this score. At 5 feet 8 inches, I’m 15 to 20 pounds heavier than I really ought to be, but I still fit comfortably within BCBSTX’s required range of 115-193 for anyone receiving a “preferred” (i.e., lower) rate. Let the scales tilt to 194, though, and I’d have to pay the “standard” (higher) rate. If, during the past year, I’d been over the 194-pound limit but, through exercise or diet or medication, managed to drop my weight to 193 or lower, my insurance agent would add to my weight half the amount I lost in calculating my eligibility. Keep the weight off for a year, though, and I’d be scored like everyone else.

The next hurdle is much higher. It’s called (with a refreshing absence of euphemism) the Automatic Decline List, and it consists of 143 diseases, from Addison’s Disease to periarteritis nodosa, that will immediately disqualify you for coverage. It’s “not all inclusive,” we are warned, but if a potential customer has any of these then the agent must show him the door. Hemophilia? Disqualified. Penile implant? Get lost, you sissy! Pregnant? Begone, slattern, until after your post-partum checkup. Organ transplant? Unless it was your cornea, we got nothing to talk about.

Nine years ago I was misdiagnosed, by an emergency-room doctor of dubious competence, as having suffered a transient ischemic attack, a sort of mini-stroke that, in one-third of all cases, presages a full-scale stroke “some time in the future,” according to the National Institute of Neurological Disorders and Stroke. That prognosis struck me as a little vague, considering stroke is the third leading cause of death in the United States, but in the end it didn’t matter. Further investigation (by me) determined that in fact I had accidentally popped three Ambiens. (Long story.) The emergency room didn’t draw any blood, which would have identified the problem instantly. Instead it took me at my word (I don’t remember this; I was stoned out of my gourd) that, no, I hadn’t taken any drugs that day. Did the paperwork ever catch up with my after-the-fact gumshoeing? I’m not sure, but I hope it did, because if I lived in Texas and was in the market for nongroup health insurance, my purported TIA would instantly disqualify me from buying any from BCBSTX.

Moving on to the Standard Rate Condition List of things that disqualify you for the preferred (but not standard) rate, I see “Anxiety/depression” (I’m busted), “GERD (acid reflux),” “Headache” (presumably that means more than the usual kind), “Herpes,” “Temporomandibular Joint Disorder,”* “Tobacco use” (that’s fair), and “Tourette’s Syndrome” (the handbook offers no guidance about what a Tourette’s sufferer is likely to say once he’s been broken the bad news). Quit smoking for a year and you become eligible for the premium rate, provided you’re no longer using a “cessation aid” or “nicotine substitution product.”

A lot of coverage decisions are contingent on multiple factors. If you’ve been treated for anxiety/depression and you’re no longer in counseling and you weren’t in counseling too long and you take no more than one medication and you have no history of hospitalization, then you can get bumped up to the preferred rate. On the other hand, if you’re still seeing a therapist, that’s enough to deny you any coverage at all. Got an anorexic teenage daughter? You can still get the preferred rate if she’s been completely recovered for five years, is no longer in therapy, maintains a normal weight, and has enrolled in the Radcliffe Publishing Course. (OK, I made that last one up. Anyway it’s moved to Columbia.) That first condition alone means there’s a good chance the young lady no longer lives at home and has acquired her own insurance policy. If you can’t meet these conditions, your policy is declined.

Let’s say you fought in Iraq or Afghanistan and lost a limb. Now you’re discharged from the Army. If it was only your fingers or toes, you can still get the preferred rate. If you lost an arm or a leg and it was more than a year ago and there are no complications, then you get a rider slapped onto your policy. (A rider typically excludes coverage for a specified pre-existing condition, i.e., the very thing you’re likely to need treatment for.) If you lost the arm or leg within the past year, or there are complications, then sorry, soldier. You get no policy at all. Maybe the Veterans Administration can help you.

Unacceptable Medications. These include a lot of anti-arthritic medications, a few anti-cancer drugs (not as many as you’d think), a bunch of anti-coagulants (including Coumadin), various anti-diabetic medications (including all insulin products), various anti-substance-abuse meds (including methadone), a few anti-thyroid medications, just about anything you’d take if you were HIV-positive (which would already have disqualified you), anti-psychotics, anti-Parkinsons drugs (Parkinson’s sufferers are also disqualified anyway), and a few miscellaneous meds.

Riders. I mentioned amputation, but I didn’t mention acne (you have to be five years past any treatment before they’ll drop the rider), bursitis (also five years), carpal tunnel (five years), colon polyp (five years; I don’t care what Katie Couric says, you shouldn’t have had that colonoscopy!),  tonsillitis (five years), and varicose veins (permanent).

By now you’re probably starting to wonder whether anyone in Texas is eligible for a preferred rate, or to be covered at all, under BCBSTX’s nongroup underwriting rules. Obviously someone must be, or BCBSTX would go out of business. But it’s a pretty select, shockingly healthy bunch. If you want to know who can’t get a policy, the underwriting guide provides a helpful list of disqualifying occupations. These include stunt pilots, test pilots, explosives handlers, and rodeo performers (OK, I’ll give them all those), but also miners, offshore drillers, and … professional athletes. That’s right. The people in absolutely the finest physical condition in America are uninsurable.

Most of these restrictions would become illegal if health reform were to become law. That’s a very compelling reason to pass the bill. But both U.S. senators from Texas (John Cornyn and Kay Bailey Hutchison) are Republican, and not a single Republican senator supports Obamacare.

E-mail Timothy Noah at

Correction, Feb. 11, 2010:
This column originally stated, incorrectly, that TMJ is the same as lockjaw. TMJ is one of many conditions (tetanus is another) associated with lockjaw. (Return to the corrected sentence.)