Can Health Insurance Companies Require Tests?

by Linda Ray
Insurance companies can require a medical exam before granting coverage.

Insurance companies thrive because they spread their risks over a wide population. They can afford to cover a person with a serious, complicated illness because they also insure many more healthy people, for example. Traditionally, health insurance companies have routinely required medical tests of applicants before granting coverage.

Large Group Policies

Medical testing typically is used by insurance companies when issuing individual or small group policies. When providing insurance to a large employer, however, they rarely require tests because of the odds that the risk will be absorbed by the sheer numbers of insured. Large groups, such as corporations with hundreds of employees instead rely on underwriting based on the group’s history. If, for example, a large group reported a high rate of claims for cancer care, they may pay a higher premium, or even be denied coverage, compared to a large group with minimal cancer-related claims.

Common Tests

Health insurance companies require a myriad of tests for various policies to determine eligibility, deductibles and premium costs. Common tests include extensive physical exams that include heart monitoring, X-rays and blood tests. Some insurance policies may require just a simple blood test and a personal blood pressure and weight measurement. Insurance companies also ask prospective clients for a release of personal information so the insurer can investigate private doctor files or check with the Medical Information Bureau to collect public medical records and histories.

Premium Determination

Medical tests may be used by some insurance companies to determine how much premiums are paid by policyholders. These tests often are supported by employers who pick up a portion of the premiums for their staff. Blood tests for nicotine are commonly used to identify nonsmokers who often are offered a reduction in premiums. Employees may have to take a body fat measurement test and tests for cholesterol and blood pressure because premiums often are higher for those who fall in the obese categories.

Genetic Testing

In 2009, the federal government passed a law making it illegal for insurance companies to base insurance coverage on the results of genetic testing. The law covers only employees who work for a company with more than 15 employees and does not protect members of the armed services, those receiving veteran’s benefits or those covered through the Indian Health Services. At the same time, the results of a genetic test can affect the costs of insurance coverage, which is why many people choose not to use their current insurance to cover the costs of genetic testing when it’s covered. A genetic test identifies genes, proteins and chromosomes that show a propensity for a certain disease. The decision to undergo genetic testing is completely voluntary; no one can force you to do it.

About the Author

Linda Ray is an award-winning journalist with more than 20 years reporting experience. She's covered business for newspapers and magazines, including the "Greenville News," "Success Magazine" and "American City Business Journals." Ray holds a journalism degree and teaches writing, career development and an FDIC course called "Money Smart."

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