Health insurance companies like to know what they are getting into before they provide anyone health coverage, and they do this with a full medical underwriting. Medical underwriting is using past medical records when evaluating a potential customer for an insurance policy. It is used to determine the amount of coverage, the premiums and if you are even qualified for an insurance policy.

There are two methods of underwriting utilized by insurance companies, a full medical underwriting and a moratorium. A full medical underwriting involves full disclosure of your past medical history at the beginning of your policy. Basically, this is giving your medical history upfront. A moratorium is when insurance companies ask for your past conditions as you make a claim. Simply put, any pre-existing condition you have before the policy is put in place is not covered, no matter if you report it or not.

When applying for health insurance, it is your responsibility to provide an honest and accurate report of any prior health conditions. Many times, insurance companies won't cover anything that occurred before your policy begins, so any pre-existing conditions someone may have wouldn't be covered by a new policy. If someone applies without disclosing a prior condition, then they may be denied any future claims or have their policy deemed invalid.

Medical underwriting is a controversial topic amongst insurance consumers. On one hand, it helps keep prices lower for the majority of beneficiaries, but it also can make insurance more expensive for the people who truly need it and thus use it more often. In fact, it can make it almost impossible for someone in bad health to receive proper healthcare coverage. If insurance companies even agree to cover an existing health problem then the price for that policy will increase, and often increase greatly.

Insurance companies use underwriting to protect themselves from what would be a bad investment on their part. Giving coverage to someone who they know is going to cost them a lot of money in claims is a bad deal for them unless they can somehow find a way to manage a profit on the consumer. If this isn't possible, then odds are they won't be providing coverage to that particular customer, at least not for the existing condition in question.

The use of medical underwriting isn't likely to go anywhere anytime soon, and while there are laws in various states that help people with pre-existing health conditions get proper healthy coverage, more often than not health insurance is out of reach for people who need it the most. As of yet, no one has found a solution to this, yet many have tried.