How Does Health Insurance Portability Work?

What Is Health Insurance Portability? 

A policyholder maintains specific policy benefits from their previous insurer through the process of health insurance portability when they change providers. The policyholder maintains pre-existing condition waiting periods, accumulated no-claim bonuses, and continuity benefits. This concept safeguards consumers from unnecessary policies and insurer penalties when they change insurance companies without compromising on continuous coverage. 

When and How Can One Port a Policy? 

The policyholder can exercise portability in health insurance rights only when renewing their policy. To exercise portability rights, the policyholder needs to start the request process at least 45 days before their current policy ends. The process typically involves: 

• The process of portability requires policyholders to submit their requests to their new insurer. 
• The process starts with completing both the proposal form and the portability form. 
• The process includes sharing medical records with previous policy information. 
• Policyholders need to take medical tests when the new insurer demands them. 

The new insurer issues a policy containing all the continuity benefits that were present in the previous coverage after approval. 

What Gets Transferred? 

The key transferable aspect of portability is the accumulated time spent under waiting periods, especially for pre-existing diseases. A person who has spent two years under a policy with a three-year waiting period would need to fulfil only one more year under the new policy. The transfer of cumulative bonuses and time-bound exclusions happens when policyholders seamlessly switch at renewal time. 

Points to Remember 

The consumer-friendly right of portability does not guarantee automatic approval. The new insurance company possesses these rights: 

• Evaluate the applicant's medical history. 
• Set new premium rates. 
• Determine portability acceptance through their underwriting standards. 

People should begin their policy comparison process early before renewal to understand policy inclusions and exclusions properly.