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Pitfalls to avoid when buying health insurance online
Letter to online searchers.

Indication that Utah has fewer regulations is correct. However....

(1) This allows carriers a wide girth to decline for various "health conditions".  I have seen many web sites ESPECIALLY out of state websites try to elevate their limited understanding that "Utah has few regulations" and profess to be experts about Utah underwriting.  When in fact they put many potential insured's at risk by publishing incorrect information on their web site.  If a Utahan with moderate health conditions does not know how to wisely go about seeking approval they will get declined.  Once declined, it is a black mark that follows you for two years minimum.  IT IS EXTREMELY difficult to get approval anywhere even "with no name insurance carriers" (carriers you haven't heard of).

(2)  SO....to go a little deeper here, one would have to understand an "oligopoly" and how it works.  Basically an "oligopoly" is a group of competing industries that watch market trends which they influence, coordinate & control between each other in a sort of "unspoken" manner.  They don't get together in a meeting and decide how they are going to do business and make bundles of money because that is now illegal (Anti Trust Monopoly Laws).  They adopt a understanding of how a "unspoken sorta monopoly hybrid oligopoly child" comes to be.  Or a oligopoly comes about by one company that has more market control which forces smaller competitors to be subordinate.  It (Oligopoly) can be a bi-product of governmental regulation gone bad.  It is a natural law that we "Economist" title it.  Basically how it works is what one business entity does what the dominate company does "mimic".  Eventually a unique market string is formed that controls market demand, pricing and service mechanisms.  This control is usually established between an average of 3-4 competing companies that are the strongest and most dominate in THEIR INDUSTRY.

 

(2A)  How does this relate to the insurance carriers in Utah? Lets look at the individual policies issued in this state.  What I am covering here does not apply to employer sponsored group insurance.  I need to point out that employer group insurance has dual governmental regulations from Federal and State levels. This causes common confusion among Utahans and this is where out of state online insurance sites further misinform and misrepresent because they don't understand.

 

Getting to my point of an "oligopoly"....lets use one very simple common & unfortunately example....Lets say you have a insulin dependent diabetic seeking insurance coverage in Utah.  One carrier (Carrier A) decides they will "decline" applicants that have this condition BECAUSE the state allows it.  Carrier A makes this decision based upon increased profits following fewer overall diabetic claims and gets approval from the state.  Carrier A has major influence in the medical provider world of hospital and doctor contracts.  This sets Carrier A above the rest of the competition (1st of three Strongest carriers).  (Carrier B) decides to "fall into step" and decline applicants that are insulin diabetic.  Carrier B can do this because the state allows.  Carrier B must fall into step because they wouldn't want to take on losses of declined diabetics from Carrier A.  Carrier B is a close rival to Carrier A in market strength (2nd of three Strongest carriers).  Carrier B is an non-profit (lower expense ratio...they hold fast to paying claims) and has name recognition that goes back to the early beginnings of health insurance in the United States.  (Carrier C) is not as strong as Carrier A & B but is in the third slot for two main reasons. 
1st reason > Their provider network of hospitals and doctors (Mountain View Health) competes against Carrier A's CONTROLLED provider network of hospitals and doctors.  2nd reason > they are stock owned by a non-domiciled insurance carrier which compels them to compete for market share.  Therefore to compete for market share (% of Utahans insured) they must also FALL INTO STEP and decline diabetics.
This micro example at this point and should be expanded to the macro of various health conditions that A, B, C carriers decline coverage for individual insurance policies in Utah.  They do have a "medical condition list" of automatic declinations for health conditions or certain histories. 

(2B)Online insurance agencies that do not operate in this state on a local basis find it hard to keep up with changes and underwriting standards.  More and more we see people that come to us that have been underwritten improperly, given bad advice by these "out of state" insurance agencies and have even been declined.  Unfortunately, we usually can't help these individuals.  One common item that is always commented on is that they recognize the legal judicial barrier present that actually protects them.  Meaning....They can set up a policy hap hazardly and if the Utah client wants to bring legal suit against them they have to ultimately fight judicial barriers....meaning they have to ultimately go to the home state of the insurance agent and file in that agents judicial legal courts.....very expensive.....low success rate for Utahans.

 
(3)Some Utahans go to A, B, C carriers on their own without representation in seeking coverage.  This is not recommended because of the many problems one can fall into without "know how" knowledge.  I compare this to someone going to court without an attorney.  Some Utahans believe that they can save money or fees by dealing directly with carriers A, B, C. They don't understand that LOCAL Utah agents & agencies are licensed and contracted by A, B, C carriers to complete field underwriting applications, service and provide policy explanations at no additional charge. 
 
(4) Some Utahans fall prey to "NO NAME" insurance carriers.  As previously described about the "Oligopoly" affect in the Utah insurance market, you have "bottom feeders / no name" carriers.  First understand that these carriers do not understand the market in Utah because on a whole it is unique when compared to the other states.  Texas as an example, fosters competition vastly because of how insurance laws are wrote in that state.  Therefore, any insurance carrier can open shop and pay state fees (usually 1 million dollars) to market insurance with a predictable return.  However, when these "bottom feeders / no name" carriers come to the Utah market they pay a "rental fee" to Carriers A (see description of these carriers in point 2a) to use their doctor and hospital network.  This is not a cheap fee.  Usually accounts in many cases upto a forth of the premium they charge you.

(4A) This is how they earn the title of "bottom feeders / no name".  Rising medical costs and trends really apply pressure to profits for insurance carriers.  Because these carriers are paying a high "rental fee" that eats up 1/4th of their premium factor they usually are VERY SLOW to NOT PAYING claims at all.  Keep in mind they have to factor in % costs to cover prescriptions, surgeries, office visits, pediatricians, well baby, physicals (not usually covered), emergency room (highest cost factor), and the list goes on.  WELL they also have to make money.  So someone gets squeezed somewhere.  TOO many times I have seen people with horror stories. 

Here is the Top 3 list and what they (online guys) don't want you to know:

1) Mega Life and Health.  We deal with Mega Life and Health outside of Utah because they have great worker comp alternatives but they are not an experienced health insurance company in Utah.  They have left many Utahans holding the bag several times by dropping coverage.

2) NASE / Association plans for the self employed.
http://www.selfemployedweb.com/nase-wsj2.htm

Another good article to read if you found this helpful > Top 5 things you should know