Insurance Question...is This Considered Fraud?

[redsquash]

What a co-incidence....applied for health insurance, and wife got pregnant

 

[STIBROKER]

But......most insurance company's issue a policy with the condition that health conditions have not changed from time the application was filled out..... could be a recension of the whole policy....

The exact wording of the question on the application is important. 20 days ago, it sounds likely that your wife did not know, or have reason to suspect she was pregnant, which would mean that there is likely no issue.

 

[Ann H]

I live in NJ and did not have health insurance. So I decided to get Individual health insurance. Applied 20 days ago. Form had the question "Are you or your spouse pregnant" Answer was NO.
Got insurance card yesterday and insurance coverage started yesterday. Today my wife told me she is pregnant. yay!!! Based on exclusion conditions (1-year) in insurance documents I think this pregnancy won't be covered since it technically started before insurance. and thats fine.
But will the insurance company consider this as fraud and cancell the insurance? I did not know this when I filled the form 20 days ago.
Do I need to call them and explain the situation? Or just pay the doctor and not claim/report insurance company?

Sunny8184, the agents who have answered this post are correct and they have added valid points. There are many interplaying issues here. Let me see if I can restate things to make the issues clear. The major issues are:

1) did you commit fraud, and must you disclose more information?

2) would the insurance company issue a policy anyway, and under what terms?

3) will pregnancy be covered, including complications of pregnancy, and/or the baby’s charges at birth?

4) What are NJ state rules?

5) what other options do you have?

• 1 - Regarding whether or not fraud was committed, your major issues are:
  • The wording on the application, and exactly how the question was asked
  • The wording of the rules about disclosure of a change in health status after the application was completed.
• 2 - The issues about whether or not the insurance company would issue a policy anyway are:
  • State laws in NJ – it’s a guarantee-issue state, but that doesn’t always mean you have full rights, as another poster reminded us. It may mean they can issue coverage, but they can raise the rates, for instance. It may mean you must follow certain open enrollment rules, or enroll in a certain plan (like a high risk pool).
• 3 - The points about coverage (assuming a policy is issued) include:
  • The wording of the pre-existing conditions clause. You already mentioned that you saw a 1 year exclusion, and that it was fine with you.
  • Whether or not pregnancy is even considered a “pre-existing condition”. (group plans and some state laws exclude pregnancy from the “pre-existing condition” clause, but ALMOST ALWAYS an individual/family plan considers it a pre-existing condition.)
  • Many individual/family policies don’t cover normal maternity anyway, but cover complications of pregnancy (subject to the question of pre-existing, however).
  • Most of the time, the baby would be covered from moment of birth, but it’s still an important issue, because if the insurance company deems the pregnancy to be a known and disclosable health condition on the application, then it’s possible they wouldn’t issue coverage to an expectant parent (or in a guaranteed issue state, they would have rules about the issuance of coverage).
• 4 – NJ state rules. I don’t know much about it, but I found the following paragraph on a NJ health insurance agency’s website. PLEASE don’t fully trust this paragraph. Just because it’s published on the web doesn’t mean it’s official. This DID NOT come from an official NJ state website.
  • The rules for individual health policies in New Jersey are different than in most other states. Here, individual insurers are not allowed to turn you down for coverage because of a health problem. Enrollment for individual coverage is only in October of each year. HIPAA eligible residents are guaranteed the right to purchase individual health insurance. Your insurance cannot be cancelled due to your illness. New Jersey requires insurance companies offer two types of individual plans: comprehensive standardized policies and the Basic and Essential Plan, which has fewer benefits. You are encouraged to thoroughly compare benefits of both plans. In relation to pre-existing conditions, insurance companies are allowed to look back at your medical records for the last six months before coverage begins. If they determine there is a pre-existing condition, they can impose an exclusion period with a maximum of 12 months at the start of coverage. If you are HIPAA eligible, the companies cannot require this pre-existing exclusion. Insurance companies are not allowed to attach exclusion riders to policies for these conditions. Pregnancy is considered a pre-existing condition in New Jersey, but any complications from pregnancy will be covered. Most individual policies have costs that are based on community ratings.
• 5 – Other options - you said in your original post that you didn’t have health insurance before. However, it’s important to know more. For instance, if you had health insurance previously, without a lapse of 63 days or more, you may qualify for Federal COBRA or HIPAA laws. Heck, it can even be longer than 63 days in some instances (like if you or your wife were in a new-hire waiting period on the job). The reason I suspect that you previously had coverage, is because (from what I read), NJ has open enrollment in October only, unless you have a qualifying event or are currently insured.
  • Check into your parents, and your wife’s parent’s group health plans. Federal law now states that it must cover children to age 26 WHETHER OR NOT THEY ARE MARRIED. Group plans usually have full maternity coverage, and do NOT consider pregnancy to be a pre-existing condition.

Please don’t be alarmed that your question raises suspicion to many of us. We get this type of response all the time. However, in your case, the tone of your writing appears that you are telling the truth, and there’s no indication in your writing that you are trying to get away with something. You said it appeared the pregnancy wouldn’t be covered anyway, and that was fine with you, but committing fraud was not fine with you. Trust me, we get a lot of these types of questions, where the person’s tone and choice of words makes it clear that they are trying to misuse the insurance system. We appreciate it when a person is not doing that. I hope you understand.

 

[Full Throttle]

What is the policy's effective date?

 

[somarco]

NJ guarantee issue guide.

P-X falls under prudent person rules which is more liberal than many.

contact the insurance company and tell them honestly what happened.

Good luck finding someone competent at the carrier. Might help if we knew who it was.

Going back to the link, NJ has standardized plans that require maternity benefits.

GI, community rating, maternity is automatic . . . I don't think the carrier has a lot of wiggle room here unless they can PROVE the applicant knew their condition and failed to disclose.

What is the policy's effective date?

Yesterday.

 

[arnguy]

If the O/P pays the doctor (hopefully a negotiated fee) and does not file a claim with the insurance carrier, IMO the fraud question is moot. In any case, they wouldn't bring a criminal or civil action because of the burden of proof for the "badge of fraud" is diffivult to provide in a court of law if he did file a claim. The worst case scenario is a recission of the policy.