In the health insurance industry, guaranteed issue refers to a circumstance in which a policy is issued to every qualifying applicant regardless of health status. All health insurance policies must be marketed on a guaranteed issue basis under the Patient Protection and Affordable Care Act (ACA).
Guaranteed issue means that everyone who applies for coverage will be accepted without regard to any medical history. The ACA requires health insurers to offer all applicants the opportunity to receive coverage regardless of health status or previous health care decisions. If an insurer decides not to offer a policy, they must tell the applicant why they were denied coverage and what they can do to be considered for another plan within the carrier's portfolio.
This requirement exists to ensure that individuals have the choice of receiving coverage if they are healthy and do not want to purchase a policy with a high cost-sharing ratio. Otherwise, they could be forced into a more expensive option if they need coverage later on. Health insurers can still limit enrollment based on age, gender, location, occupation, experience, substance abuse treatment, mental illness, and other factors but cannot deny coverage to anyone who applies for it.
If you ask most people what is wrong with health insurance today, they will say its too expensive for most people. This is because there are a lot of people who think of health insurance as something only sick people need. This is not true at all!
Guaranteed acceptance life insurance, also known as guaranteed issue life insurance, is a form of whole life insurance policy that does not require you to answer health questions, take a medical exam, or enable an insurance company to check your medical and prescription records. The insurance company simply asks if you have been diagnosed with any heart conditions or other illnesses. If you say yes, they will probably ask what type of treatment you received for it. They may also want to know how long you have had it. There are several types of guaranteed issue life insurance policies available, such as universal life, variable life, and indexed-universal life.
With this type of policy, the insurance company gives you a free endowment policy in addition to your guaranteed issue life insurance policy. Your endowment policy can be placed with another company at any time. It will remain active until it expires or is cancelled. At least once a year, you should review your policy to make sure it remains valid and increase its value by adding more money to it. If you decide not to renew your endowment policy, then it will lapse after one year unless you choose to keep it active for a longer period of time.
The advantage of this type of policy is that there is no medical question asked when you apply for it. If you are already sick when you apply for this policy, you will probably not be able to get approved.
All insurance under the ACA are guaranteed issue, which implies that applicants will be provided health coverage regardless of their health status, age, or income. Prior to 2014, most states' individual market coverage was not assured. Instead, insurers determined an applicant's eligibility for coverage based on his or her medical history. If found eligible, the applicant was issued a policy. If ineligible, he or she was denied coverage.
Under the ACA, all individuals are required to have health insurance or pay a tax penalty. If someone decides not to buy coverage, they can go without penalty as long as they do so by March 31 of each year. Otherwise, they would need to file an extension form with the IRS by April 15 of that year in order to avoid paying a tax penalty.
Those who cannot afford coverage must purchase it through an exchange established by their state. The federal government will provide funding for any state that chooses not to run its own exchange. Each state has the freedom to design its own exchange system, but it must comply with certain guidelines set forth in the ACA. States that choose not to create their own exchanges can instead use the Federal Exchange system, which serves as a single location where individuals can compare rates and purchase coverage.
Those who work for companies that don't offer insurance and make too much money to qualify for a subsidy, can also enroll in Medicaid. The federal government will cover any costs not covered by the state, with few exceptions.
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